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Is the Economic Recovery Beating All Projections?

Is the Economic Recovery Beating All Projections? | MyKCM

Earlier this year, many economists and market analysts were predicting an apocalyptic financial downturn that would potentially rattle the U.S. economy for years to come. They immediately started to compare it to the Great Depression of a century ago. Six months later, the economy is still trying to stabilize, but it is evident that the country will not face the total devastation projected by some. As we continue to battle the pandemic, forecasts are now being revised upward. The Wall Street Journal (WSJ) just reported:

“The U.S. economy and labor market are recovering from the coronavirus-related downturn more quickly than previously expected, economists said in a monthly survey.

Business and academic economists polled by The Wall Street Journal expect gross domestic product to increase at an annualized rate of 23.9% in the third quarter. That is up sharply from an expectation of an 18.3% growth rate in the previous survey.”

What Shape Will the Recovery Take?

Economists have historically cast economic recoveries in the form of one of four letters – V, U, W, or L.

A V-shaped recovery is all about the speed of the recovery. This quick recovery is treated as the best-case scenario for any economy that enters a recession. NOTE: Economists are now also using a new term for this type of recovery called the “Nike Swoosh.” It is a form of the V-shape that may take several months to recover, thus resembling the Nike Swoosh logo.

A U-shaped recovery is when the economy experiences a sharp fall into a recession, like the V-shaped scenario. In this case, however, the economy remains depressed for a longer period of time, possibly several years, before growth starts to pick back up again.

A W-shaped recovery can look like an economy is undergoing a V-shaped recovery until it plunges into a second, often smaller, contraction before fully recovering to pre-recession levels.

An L-shaped recovery is seen as the worst-case scenario. Although the economy returns to growth, it is at a much lower base than pre-recession levels, which means it takes significantly longer to fully recover.

Many experts predicted that this would be a dreaded L-shaped recovery, like the 2008 recession that followed the housing market collapse. Fortunately, that does not seem to be the case.

The same WSJ survey mentioned above asked the economists which letter this recovery will most resemble. Here are the results:Is the Economic Recovery Beating All Projections? | MyKCM

What About the Unemployment Numbers?

It’s difficult to speak positively about a jobs report that shows millions of Americans are still out of work. However, when we compare it to many forecasts from earlier this year, the numbers are much better than most experts expected. There was talk of numbers that would rival the Great Depression when the nation suffered through four consecutive years of unemployment over 20%.

The first report after the 2020 shutdown did show a 14.7% unemployment rate, but much to the surprise of many analysts, the rate has decreased each of the last three months and is now in the single digits (8.4%).

Economist Jason Furman, Professor at Harvard University‘s John F. Kennedy School of Government and the Chair of the Council of Economic Advisers during the previous administration, recently put it into context:

“An unemployment rate of 8.4% is much lower than most anyone would have thought it a few months ago. It is still a bad recession but not a historically unprecedented event or one we need to go back to the Great Depression for comparison.”

The economists surveyed by the WSJ also forecasted unemployment rates going forward:

  • 2021: 6.3%
  • 2022: 5.2%
  • 2023: 4.9%

The following table shows how the current employment situation compares to other major disruptions in our economy:Is the Economic Recovery Beating All Projections? | MyKCM

Bottom Line

The economic recovery still has a long way to go. So far, we are doing much better than most thought would be possible.

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Coldwell Banker Vanguard Realty, Erin E. King MBA IconColdwell Banker Vanguard Realty, Erin E. King MBA

3610 Saint Johns Avenue Suite #103, Jacksonville

5.0 7 reviews

  • Avatar Nick Freeman ★★★★★ 10 months ago
    Erin was excellent! He made the home buying process for my wife and I simple and stress free. His expertise and knowledge of the historic homes of Jacksonville allowed us to feel confident in our decision to buy a historic home. We interacted … More with multiple realtors prior to meeting Erin and I must say he was by far the most impressive. His authenticity and genuine interest in findings us the right home really set him apart from others. I highly recommend working with Erin King.
  • Avatar lindsey kilbride ★★★★★ 11 months ago
    Talk about a stress-free experience purchasing my first home! Having Erin King as my realtor was the best decision. He knows his stuff and helped me get a great price on my dream first home in a seller’s market. He did a tremendous job … More negotiating. There’s no pressure with him and he’s not going to let a buyer settle for a home that isn’t the right fit. There were no surprises throughout the closing process as he keeps his buyers in the loop. Even when a minor issue came up with the appraisal, he called me with his plan to remedy the problem and it was fixed that week. Erin truly looks out for his clients, alerting of any red flags but is reassuring about bumps during the process that can be easily handled — that’s why his wealth of knowledge and experience is such an asset, he’s seen it all. A bonus: he’s really nice and funny! Great person to work with. I highly recommend him.
  • Avatar Roberto Vieira ★★★★★ 9 months ago
    This was my first time buying a house and Erin made the entire process seamless. His knowledge and attitude allowed me to decide on a house with confidence and the fact that he is on your corner during the entire process, does make you … More very at ease. Buying a first house didn't have to be scary. Who knew!
  • Avatar life changer ministry ★★★★★ a year ago
    Erin is by far the best realtor I worked with. I really enjoyed working with him. He has a wealth of knowledge about the housing market as well as home inspection. He is also a great negotiator. Was able to close on my house in 28 day … More and i had zero sleepless night. Didn't have to worry about a thing. Everytime I had a question he always had an answer and always returned my calls promptly. Erin is my realtor for life. I Will be referring Erin to all my friends and family members.
  • Avatar Kerry Fitzgerald ★★★★★ a year ago
    My experience working with Erin was by far the best I have ever encountered with a realtor. He quickly identified important aspects that I wanted in a home and was able to narrow down key properties to consider. In addition Erin’s displayed … More strong knowhow through his extensive knowledge of the areas and market I was considering. Balancing pros/cons and keeping me well informed at every step. By leveraging his strong listen skills and attention to detail we found my dream home in a very short time. Erin continued to support me throughout the sales process and well after to ensure my expectations were met and exceeded. I would absolutely recommend Erin to any of my colleagues, friends and family on future home purchases.

Coldwell Banker Vanguard Realty - Erin E King MBA REALTOR
5.0
Based on 4 reviews
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Alpha Foundations
Alpha Foundations
16 hours ago
The team showed up when I was told they would to encapsulate the crawlspace of my 1924 bungalow in Avondale. Like many folks with above grade homes our home suffered from very high humidity levels. The Foreman was informative and professional as well as the rest of the team. They began work immediately and graciously answered every single one of my questions (I ask a lot of questions). They worked, the first day, until dark, and returned very early the next morning to finish up. Here we are just 24 hours later and my home feels, already, more comfortable than I can remember. The clean space crawl space, although a big investment, is worth every single penny. Their 25 year warranty, and emergency call number if something happens is very reassuring they will be there for me down the road if I need them.
The Happy Grilled Cheese
The Happy Grilled Cheese
1 day ago
The bricks and mortar version is just as good as the truck itself. Best grilled cheeses!!! Yum!
First Watch - Riverside
First Watch - Riverside
1 month ago
For being less than thirty days old, the location is performing well above par. We were greeted the moment we hit the door, we sat at the bar top, and received excellent service. The food was delivered promptly considering the volume. Excellent work all around, keep it up and welcome to Riverside!!!
Good Dough
Good Dough
2 months ago
Excellent first experience!! We will definitely be back.
David M.
David M.
2020-04-14 07:12:21
My wife and I worked with Erin when he was at Bloom Realty to buy our first home in 2018. We had a great experience. As first-time homebuyers from out of...
Simone J.
Simone J.
2020-03-13 11:57:13
Erin is the best! If you are looking for someone who tells you like it is, and points you towards what you want and actually needs, he is the realtor for...