The American economy continued its recovery after being virtually shut down in March.
The unemployment rate in August dropped to 8.4 percent from 10.2 percent in July, a 17-percent decline. In April it was a staggering 14.7 percent. So, we’ve had a 42-percent drop in unemployment from the worst of it. Meanwhile, weekly unemployment claims dropped to 880,000–the first time they have been under 1 million since the shutdown. Economists polled by Reuters, their crystal balls as cloudy as ever, had predicted 950,000 unemployment claims.
Nonfarm payroll employment rose 1.4 million in August, a more modest rise than in the previous three months.
The best job gains were in health care and leisure and hospitality, as these sectors of the economy continued to reopen. The exception is New York City. Despite the fact that restaurants and bars are open, at reduced capacity, in the rest of New York State and in all surrounding states, indoor venues inside city limits remain mostly shuttered. New York City’s hyper-progressive mayor has said he doesn’t even have a plan to reopen restaurants in 2020 (despite the 330,000 New Yorkers restaurants employed before the pandemic). Manufacturing jobs increased by 29,000, mostly in the non-durable goods sector, although total manufacturing employment is still down a whopping 720,000 from February. But manufacturing activity is now nearing a near two-year high.
The stock market, meanwhile, is strongly indicating a quick economic recovery. While they plunged into bear market territory in March, the markets have enjoyed a V-shaped recovery. Both the NASDAQ and S&P 500 have been setting records, while the Dow crossed over 29,000 on Wednesday, up from 18,213 in March. There was a severe tech selloff yesterday, a normal reaction to the swift rise in July and August.
The Bureau of Labor Statistics reported that 26 percent of the workforce is “teleworking” rather than traveling to offices, down from 27 percent in July. It is likely that a substantial (but unknowable) percentage of these teleworkers will never resume 5-day-a-week commuting. That’s bad news for both urban real estate markets and mass transit systems, to say nothing of the cities they serve.