The April jobs report laid bare the economic impact of the coronavirus pandemic. Five market experts weigh in on what this means for the U. S. economy moving forward.
The April jobs report laid bare the economic impact of the coronavirus pandemic.
The loss of 20.5 million jobs in April alone has sent the unemployment rate to 14.7%, its highest since the end of World War II. On Thursday, it was announced the total number of jobless claims is up to 33.5 million over the past seven weeks.
Five market experts weigh in on what this means for the U. S. economy.
Kate Moore, head of thematic strategy for BlackRock’s Global Allocation investment team, says investors should turn their focus to the composition of the economy rather than its size.
«There are so many variables in predicting economic growth over the next couple quarters or the next couple of years even. And so, as investors, you know, we can’t focus so much on the size of the overall economy. I think the real project has to be the composition of the economy. And over the last six to eight weeks, we’ve started to see some consumption patterns change. What I’m really looking forward to is sort of thinking about the themes that are going to be dominant in the overall market. Where will people feel comfortable spending over the forward quarters? Where will businesses be putting their investments spent around technology [or] around systems? And, you know, really focusing on the composition, not the overall size. I have to say, as investors, it’s tempting to look really far forward. We always want to have a long-term perspective in terms of forecasting earnings, or in terms of forecasting overall activity, and it is really challenging in this environment. So, getting to know balance sheets and really digging deep with management teams I think is the best way to pick the winners.»
Glenn Hubbard, former economic advisor for the White House, says the government needs to continue to provide support during the economic recovery period.
«I think we could be back to the same level of GDP by late 2021 or early 2022. That’s not a good news story, and it could well be worse. What we need is government intervention to continue…. We’ve got to focus on the public health aspects first, the testing and tracing, and then see what it needs to be for a gradual reopening.
