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Weekly roundup: Best jobs numbers seen so far in the pandemic

Weekly roundup: Best jobs numbers seen so far in the pandemic

| August 07, 2020
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It is finally a lovely day in Cincinnati, but we know the weather where you live is smoky (California), very stormy (east coast), and very hot (Utah)! Wishing everyone a very good weekend, wherever you are! There were a few pieces of optimistic news about American life this week! We’ll dive in to that to get started.

Moving in a Positive Direction

  • Unemployment has dropped to 10.2% and weekly new jobless claims total 1.2 million, the lowest levels of the coronavirus pandemic so far. The pre-pandemic record was 695,000 new jobless claims in a week in 1982. (CNBC) The pace of job growth did slow significantly from June’s 4.8 million job gain, suggesting a stalled improvement as coronavirus cases surged and states pulled back on reopening plans. (Axios) 

  • Less-deadly flu season expected this year: Winter began two months ago in the Southern Hemisphere, and the annual influx of flu has not shown up. The low incidence of seasonal flu is attributed to individuals’ countermeasures against contracting Covid-19, including wearing masks, social distancing, and hand washing. This is expected to be a silver lining in the U.S. as well, with fewer flu cases expected as Americans continue such countermeasures through our upcoming winter. (WSJ) 
  • Higher savings and better credit: Americans cut back on credit cards and increased their savings during Q2, which was the worst three-month economic period in U.S. history. Household debt fell for the first time in six years. The CARES Act has helped prevent large-scale delinquency so far, though that may change rapidly if its temporary assistance were to disappear. (Axios)


Other Economic News 

  • Stimulus deal is still stalled. While the hope for new stimulus measures helped stocks rally to fresh multi-month highs, Senate Majority Leader McConnell stated that no significant progress had been made on stimulus talks. About 20 GOP senators have indicated they won’t vote for any further aid due to the very high current federal budget deficit. 
  • Local governments have been forced to make layoffs of 1.5 million people so far. Cities and states are likely to have additional rounds of deep budget and job cuts in police, fire, sanitation services and education. One of the sticking points of the stimulus deal is whether to provide aid to state and local governments. 
  • CEOs forecast a slow recovery. The plurality of U.S. chief executive officers (42%) foresee a U-shaped recovery (blue line), while 26% expect the dreaded L-shaped recovery (gray line), and 23% forecast a W-shaped recovery, or a double-dip recession. Only 9% of U.S. CEOs predict the best-case V-shaped recovery (orange line), which economists have essentially ruled out as a possibility at this point. (Fortune)

  • Geopolitical economics continue to be tense. President Trump issued an executive order banning U.S. transactions with the parent company of TikTok if the company is not sold within 45 days. The Trump administration cites ‘emergency powers’ as the basis for the unusual orders aimed at specific companies. 
  • Chinese companies on U.S. stock exchanges may be forced to give up their listings unless they comply with U.S. audit requirements by 2022. The Senate passed a bipartisan bill in May to force this, and the Trump administration published a plan to that effect this week.  
  • Stock market remains highly valued, according to Shiller Price-Earnings (PE) ratio. The Cyclically Adjusted PE (CAPE) Ratio uses current price divided by the average earnings from the past ten years, adjusted for inflation. It shows that the current markets are priced higher than all but three points in the past, including Black Tuesday in 1928 and the 1999 tech stock crash. This doesn’t guarantee anything for the future but does indicate a statistical unlikelihood that S&P 500 prices will continue climbing much higher in the short term. 


This week’s bonus content is a new car! GM revealed its first electric vehicle that will use the company’s new Ultium battery system and modular platform, which will underpin the 20 electric vehicles that GM plans to launch by 2023. This first vehicle is the Cadillac Lyriq, shown below. 

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