My 2021 theme in my prediction article for this year was.
“Hope smiles from the threshold of the year to come, whispering ‘it will be happier’…”
― Alfred Lord Tennyson
Yes, we are indeed dealing with the surge of the Delta variant. However, as I have stressed last year and this year. The United States Of America has learned to consume goods and services with an active virus infecting and killing us each day. As crazy as that sounds, this is the reality of what the data has been telling us with the 2nd and 3rd surges. Now, we are dealing with the Delta, and that might not be the last one. However, the fear of Covid19 like we had during March and April 2020 is no longer with us. We also have over 70% of the country with at least one shot, and a recent surge in vaccine shots has been encouraging. While having this latest surge in cases is not idle, we are still in a much better place than what we were dealing with in March of 2020.
Last year was an extremely challenging year for the United States of America and the world. However, the recession ended in April of 2020, and we have been fighting our way back as one country, even with the divisions we have today. It was all of us still like it always has been, the drive to win.
I added some key data points in this article to show my case as America Is Back economic recovery model was written back on April 7th, 2020. This key phrase says it all.
However, with all the positive data we have had, the one sector that I didn’t believe would come back to Pre Covid19 levels was the jobs market in 2020 or 2021. I still believe we will get all the jobs lost to Covid19 by September of 2022 or earlier, and now we have 5,700,000 more jobs left after the latest jobs number posted 943,000 jobs created.
From BLS: https://www.bls.gov/news.release/pdf/empsit.pdf
Total nonfarm payroll employment rose by 943,000 in July, and the unemployment rate declined by 0.5 percentage point to 5.4 percent, the U.S. Bureau of Labor Statistics reported today. Notable job gains occurred in leisure and hospitality, in local government education, and in professional and business services.
Breakdown of the job gains. We have many job openings in Americans; those darn robots and immigrants seem not to be taking all the jobs. Remember, we had elevated job openings before Covid19 hit us as well. Every year more and more baby boomers leave the workforce.
From BLS: https://www.bls.gov/charts/employment-situation/employment-by-industry-monthly-changes.htm
A big theme of mine on Twitter for a while is that we should see JOLTS ( Job Openings) 10,000,000, so far we haven’t gotten to that level yet—job openings at 9,200,000.
Manufacturing job openings look like a home price growth chart.
We are early in the economic expansion, don’t forget that. Next year we should get some fiscal stimulus spending. However, even without that, our household formation economics really showed its muscle during this brief recession and fast recovery. As long as you weren’t stuck in 2008 mode, you would have been fine. We still have a lot of work to do, and the rate of growth in GDP and a lot of economic data probably has peaked. However, slow and steady wins the race.
The leading economic index has recovered to all-time highs; this looks much different from the previous expansion’s recovery.
The St. Louis Financial Stress Index, a key variable in America Is Back Economic Recovery Model is bored currently; we won’t be able to stay at these calm levels forever, so keep an eye out here. As always, know the components.
Currently at -0.9473: The Black Line Is Zero, which is considered to be normal.
We still have a lot of work left to get everyone who lost their jobs due to Covid19 back to working again. Another thing for 2021, try not to read too much into the bond market action. My forecast range for the 10-year yield in 2021 was 0.62% – 1.94%.
I feel like when we eventually get that stock market correction and bond yields could head down to below 1%, people will overreact as they did to every pullback in the previous expansion. Relax!
Personally speaking, unless we break over 1.94% or below 0.62%, clearly and with some duration, don’t overreact to short-term bond moves. We are in year one of the expansion.
Apologies for being late on the jobs report article; I am vacationing at the Amanyara resort, which I highly recommend.
One last reminder, I won’t be writing my housing articles on this blog anymore. You can find all my housing work on HousingWire.Com https://www.housingwire.com/author/logan-mohtashami/. I will be providing economic updates on my blog. I will also be speaking in Frisco, Texas, this coming September 28th at the 2021 HousingWire Annual Event.
Have a wonderful weekend everyone! USA!
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, spends his days and nights looking at charts and nothing else.