Trolling through government statistics this morning to understand where we really are, I found some pretty dire statistics, whether from the US Department of Commerce, the Federal Reserve (Richmond) (Fed), or the Congressional Budget Oﬃce (CBO). The table of US Economic Indicators below summarizes some of these results. None of this is news really, but it is important to understand how deep we are before speculating on an eventual recovery.
If there is a bright spot in the data, it might be that the personal savings rate jumped by 33% in April as consumers held on to their money and spent less across the board.
The Fed also alludes to the underlying expansionary monetary policy in the US by showing a vast increase in the M2, i.e., one measure of money supply, the reduction in personal consumption inﬂation (-4.6%, April vs. March), and a negative Real Federal Funds Rate of -1.6% in April.
This is also evident as the PPP, EIDL, and other programs succeed in pumping money into the economy— even if their implementation has been less than perfect.
As we have all seen, the economic impacts have been very uneven, with some industries being hit much harder than others. See the chart from the CBO below on the subject of Job Losses by Industry. The chart was accompanied by this grim summary:
“The more than 20 million conﬁrm payroll jobs lost during March and April were concentrated in industries that rely on a high degree of interactions, including leisure and hospitality, retail trade, and
educational services. The leisure and hospitality industry was hit particularly hard, losing more than 8 million of its 17 million jobs.”
Concerning to me was another snapshot from the Fed that cited 20 indices of economic activity of which only 3 showed improving trends from March to April.
So, what about the recovery? Where is it? When will it start?
The Congressional Budget Oﬃce has an interesting perspective on this that is quite speciﬁc. See the Real Output graphic at right.
The accompanying text states:
“Although economic conditions are projected to improve following their sudden drop, real output is expected to be 1.6 percent lower in the fourth quarter of 2021 than it was in the fourth quarter of last year.”
The Fed also cites statistics revealing an expected recovery portrayed through the optic of an increasing Federal Funds Rate (midpoint) forecast to rise toward 1.5% end of 2020, 2% of 2021, 2.2% of 2022.
The CBO goes on to predict a resumption of economic activity: “The economy is expected to begin recovering during the second half of 2020 as concerns about the pandemic diminish and as state and local governments ease stay-at-home orders, bans on public gatherings, and other measures. The labor market is projected to materially improve after the third quarter; hiring will rebound and job losses will drop signiﬁcantly as the degree of social distancing diminishes.” So, a recovery does seem to be on the cards. At the Barrett Group we have seen the Covid-19 crisis having relatively little impact on the executive hiring market. In the most recent eight weeks we have helped 30 executives land jobs or ﬁeld attractive oﬀers. Read about their experiences on our Hiring Line website.
So, from our perspective, we have never seen any reason for executive job changers to sit on the sidelines. Those who got started on their career change earlier will be farther ahead in the hiring process. Those who have not yet started, should start now or they may be left behind as the economy returns to a semblance of normal.
The Barrett Group gives clients a signiﬁcant leg up through our unique ﬁve-stage Career Change Process, supporting them with a six-member-team of professionals to get into the market eﬀectively and faster than they ever could on their own, regardless of industry or geography.
Are you prepared for the recovery? Let’s talk and ﬁnd out!