It was almost one year ago when I wrote the America is Back economic recovery model for 2020 on April 7th; I truly believed that we could recover in 2020. This belief’s core basis is that our demographics were much better in 2020, and we had no consumer debt leverage bubble to deleverage. These two are potent economic forces to go along with disaster relief.
“I believe the months of April and May are going to tell an epic story of America’s start in defeating this virus. If we do this right and document the cause and effect of our efforts, future generations will be able to look to this period in time for how to handle a global pandemic.“
“My faith in America winning has never let me down because I always believe in my people and country. I can tell you now, this virus isn’t changing my view on that.”
The last update for 2020 can be read here:
A few months ago, I started my job theme, The Calm Before The Jobs Storm. With the vaccination process starting and now doing much better than I even thought, now is the time to talk about when we get all the jobs back lost due to Covid19. I truly believe we will get all the jobs lost to Covid19 by the end of September 2022 or earlier.
Ladies and gentlemen, boys and girls of all ages, Act II of America is Back is on, and the quest to get all the jobs back lost due to the Covid19 is well underway. Soon, we will all be able to walk the earth freely, and a lot of the economic sectors that have been held back from the poising of the Devil will no longer stay in a cage. On to the report which beat estimates and jobs came in at 916,000 with positive revisions.
From the BLS: https://www.bls.gov/news.release/pdf/empsit.pdf
“Total nonfarm payroll employment rose by 916,000 in March, and the unemployment rate edged
down to 6.0 percent, the U.S. Bureau of Labor Statistics reported today. These improvements in the
labor market reflect the continued resumption of economic activity that had been curtailed due to the coronavirus (COVID-19) pandemic. Job growth was widespread in March, led by gains in leisure and hospitality, public and private education, and construction.”
From BLS: https://www.bls.gov/charts/employment-situation/employment-by-industry-monthly-changes.htm
From BLS: https://www.bls.gov/charts/employment-situation/unemployment-rates-for-persons-25-years-and-older-by-educational-attainment.htm
Less than a high school diploma 8.2% (Peak was 21.0%)
High school graduate, no college 6.7% (Peak was 17.3%)
Some college, or association degree 5.9% (Peak was 15%)
Bachelor’s degree or higher 3.7% (Peak was 8.4%)
The 10-year yield from my take based on the AB economic recovery model was always telling us things would be ok. However, that statement has been more clear since the early part of August. The range of 1.33% -160% that was a must in 2021 has already been established. The only question is how high this can go. Currently at 1.718%. I did tackle this discussion this week on HousingWire.
Without any fiscal stimulus in place, just disaster relief, our economy made an impressive comeback because we were never going into recession without Covid19. We still had over 130,000,000 plus people always working and had solid financial balance sheets during the worst months of Covid19 from people that didn’t lose their jobs. With our household formation demographics in place, you can see why the leading economic index recovered much more quickly than it did in 2008. Also, this is a massive reason why the U.S. housing market has been solid during this brief recession. With having such success with disaster relief, we have a good framework to limit any big downturn in the economy in the future. We need to make sure that consumer credit stays reasonable. While many believe we have never had an overheating economy because wages were never exploding higher. We did have an overheating economy from 2002-2005 based on unhealthy consumer credit expansion and overleveraged financial institution. We didn’t have that issue this time around with consumers.
Have a good weekend everyone, we still have a lot of work left to do to get back all the jobs lost to Covid19, but we are heading in the right direction. Every week as more and more people get vaccinated, we are getting closer to walking the earth free again.
Logan Mohtashami is a Lead Analyst for Housing Wire, financial writer, and blogger covering the U.S. economy with a specialization in the housing market. Logan Mohtashami, now retired, was a senior loan officer at AMC Lending Group, which has been providing mortgage services for California residents since 1987.