Economic Briefing

With the coronavirus crisis deepening the economic fallout has also deepened. According to Labor Department statistics by the start of December more than 20 million workers were collecting unemployment benefits under state or federal programs. 

From February to November more than four million people left the work force entirely. They are neither working nor actively seeking a job. The last time this many workers left the workforce it took almost a decade to get them back to work. 

Roughly half of the individuals who lost their jobs when Donald Trump tanked the economy have been rehired. At this rate it will take another 29 months to return to the previously-robust 2019 employment levels. While it is true that many who were laid off in the spring have returned to work – despite actively looking there is a growing subset that has been unable to find new jobs. The share who have been out of work for more than six months is now approaching 40%. We can only hope that under a Biden economic recovery the return to normalcy will be faster. 

More families today are unable to meet their basic needs. In a nation of cheap and abundant food more families today are experiencing food insecurity - with the impact falling disproportionately-upon children. Think about that. Furthermore, mortgage delinquencies and evictions will reach record levels over the holidays. They are higher today than before Trump took office. And by the close of 2020 the Donald Trump economy will lay claim to the largest number of business bankruptcies in the history of this nation. 

If sin exists in this world here it is. 

In the run-up to the election Donald Trump was fond of bragging about employment gains among people of color.  The truth of the matter is that in the Trump recession the unemployment rate among black men is now 11.3% - double that of white men. For context, never during the great recession did the overall unemployment rate ever rise above 10%. 

Not all is grim news, however. There are rays of hope. On a positive note, wages and salaries have experienced a v-shaped recovery. This bounce is encouraging evidence of a swift return to normalcy. 

Concurrently, the pandemic has altered our day-to-day lives. Remarkably, it hasn’t halted our spending as much as it has altered it. The consumer economy has shifted from services to goods. Think: grocery purchases have supplanting eating out. 

While it is true that half of all businesses that were closed during the depths of the Trump shutdown in March of this year will never reopen there is a bright spot on the economic horizon. Instead of being stopped in its tracks the economy may be adapting.  New business applications are up 43% over last year. 

Bottom line is that there are green shoots appearing in the wreckage of the Trump economy. A decade after the Great Recession the American economy has shown itself remarkably resilient. Stimulus programs that are scheduled to expire at the end of this month should be extended with a stop-gap COVID relief bill from congress.  For those sectors hardest hit - such as the travel, airline, hospitality, restaurant and other service business - this would do well to address short term suffering and ameliorate long term harm to the economy.