Notes from the Trenches (2)

Article source: ConstructConnect

• Economists work under a disadvantage. Most of their signposts lie half a mile behind them. Readings on GDP, jobs, inflation, retail sales and foreign trade are quarterly or monthly. Data release schedules dictate that the latest numbers report on what has happened, not what is happening. In the current virus-induced crisis, events have turned negative with incredible rapidity. The first indications of extraordinary trouble came in daily interest rates and daily stock market quotations, both of which plummeted.

• Next in line has been the weekly U.S. ‘initial jobless claims’ number. For the week ending March 14, it rose by a substantial +70,000. In retrospect, that was nothing. For the latest week, ending March 21, it soared by +3.0 million. When its current level of 3.3 million is placed in a graph, it turns all previous readings into a flat horizontal line way down below near the x-axis.

• It was a big deal when initial jobless claims gradually receded from 670,000 in the last recession to near 200,000 only a short while ago. 3.3 million is five times the previous peak and nearly 17 times the recent trough. It’s an increase so massive, it’s impossible to fully understand the significance. It’s as if all the workers normally employed in Washington State or Massachusetts were laid off all at once.

• Three words are particularly pertinent with respect to recovery ‒ ‘containment’, ‘stratification’ and ‘antibodies’. Once the contagion is contained, either through social distancing or running its course, a restoration of some measure of normalcy will proceed automatically. ‘Stratification’ refers to who can return to work soonest, and that’s where antibodies become important. Younger people have more resistance to the lethal aspects of COVID-19. But there are also individuals who’ve lived through the illness or who contacted the strain, but never experienced many of the symptoms. They’ve built up antibodies. They qualify to go freely about their regular business.

• Finally, as some commentators have been pointing out, a side effect of the economic shutdown has been noticeably less pollution. Among all nations, Italy has imposed one of the most severe lockdowns. The water in the canals of Venice is said to be cleaner and clearer than it has been in centuries.

Category: ConstructConnect

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