May Economic Review: The worst month ever for the U.S. economy?
May 19, 2020
Economic Review: April – the first full month of the shutdown (Page 3)
After a significant dip in economic activity over the second half of March, April saw perhaps the most rapid downturn on record. Mandatory stay-at-home orders, the (hopefully) temporary closure of “non-essential” businesses, disrupted or broken supply chains, and lack of consumer demand have driven record highs for unemployment.
Financial Markets Review: What goes down…must come up? (Page 4)
Despite the record rapid and severe economic downturn, broad equity indices jumped in a way not seen since 1987 in April. While the S&P 500 stock index remains well below its February all-time high, it has recovered about half of its steep decline in less than a month.
The Outlook: A choppy recovery ahead (Page 5)
There is a case to be made that the combination of pent-up demand and aggressive monetary and fiscal stimulus will eventually lead to a solid and sustainable expansion, but this will likely require the virus to run its course in one form or another. Until then, the recovery process is likely to prove choppy, resembling more of a W or a U rather than a V.