Faltering Friday – Investors Begin to Factor Risk Back In

ImageHow good is the economy, really?

Barry Ritholtz summed it up nicely yesterday with these key economic points:

• Unemployment RateU-3 unemployment was only 3.5% in February 2020, and it skyrocketed to peak at 14.9% in April — and that likely undercounted full unemployment. It is 10.2% as of July 2020, a big improvement, but far above the recent lows. Not only that, as a reminder, the worst the Unemployment Rate ever got during the Great Financial Crisis was 10% in October 2009.

• GDPReal GDP bottomed in Q4 2008 at -2.16% (annualized); today its -9.49% (annualized); if you prefer to use nominal GDP, that bottomed in Q4 2008 at -1.86% annualized, today it is -10% (-9.986%).

• Non-Farm payroll workers: There were 152.463 million people employed in February 2020; That fell to a low 130.303 million in April; it has since recovered to 139.582 million. There are 12.88 million people who have lost their jobs since the pandemic spread and have still not found new ones since the recession began.

Look back at the GFC: Peak to trough, the total job loss in 2007-10 was 8.7 million. There are 48% more people unemployed right now than at the peak of the GFC.

• Existing Home Sales: The Existing Home Sales (Seasonally Adjusted Annual Rate) were at 5.76 million in January 2020; they bottomed in May 2020 at a (SAAR) of 3.91 million, have since recovered to 4.72 million in June 2020. The


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