Per a recent Axios article, unemployment rates are looking at Great Depression-era dire. However, what we are looking at in a historical context is unlike the Great Depression or any natural economic downturns since. With the forced shutdown of businesses for pandemic reasons – rather than a natural economic cycle, the recovery is going to be completely different.
What I suspect we may see is a quick bump of positive in employment from May through July, possibly even getting back to single-digit employment numbers by the end of summer. What will NOT help is government assistance which pays out more than people were making when they were employed; nor will any governmental barrier – and I am mostly speaking about state and local here – to new business ventures. The states and localities which get out of the way of business development will have the fastest recoveries.
The current oil situation will hurt some, but may also wind up as a blessing in disguise. Transportation and travel costs will be a LOT cheaper – which means a little more willingness to travel for tourist destinations. If we see little to no spread of the virus as places like Disney open up, even more economic activity will start moving.
However, it is unlikely that federal and state governments will see things the same way. When the economy takes a hit, the hammer of economic stimulus to fix the problem looks too appealing to many in power. Economic stimulus tends to be targeted, inefficient, and “picks winners” rather than letting markets shake out naturally.