The recovery in air travel following the COVID-19 shutdowns has stalled and remains at about 40% of 2020 levels. Corporations such as General Motors have extended work-from-home until at least 2021 and could likely extend it after that until the coronavirus vaccine is widely distributed, namely until the second-half of 2021. Working from home likely
We are now over 150 days into “15 days to stop the spread,” which began in mid-March. Consequently, a quick, “v-shaped” economic recovery is not possible. The recovery will be gradual and prolonged, though there are signs of recovery. Monthly job growth has exceeded expectations since May, and the economy contracted by less in the
COVID-19 and the wave of shutdowns that followed resulted in the worst recession since the Great Depression. Had the pandemic not occurred, 2020 would have been a lot like 2019, a year of peace and prosperity. Certainly, there are reasons to be pessimistic. What are some reasons to be optimistic? A major source of optimism
Concerns have been raised by some that the COVID-19 recession will lead to economic deflation, while others say inflation. Which outcome is more likely? Deflation stems from a collapse in the money supply while inflation stems from a rapid expansion of the money supply (i.e. “printing money”). The money supply collapses when there is a
The COVID-19 coronavirus spooked the markets. The Dow Jones Industrial Average lost nearly 3,600 points during the last week in February, and had large swings the following week. The market’s concern is not related to the “human cost” of the virus – the virus’ infection rate is low. At this writing, China had roughly 80,000
It is widely believed that an additional $2 billion per year is needed to fix Michigan’s roads. Why is there not yet a road-funding package? With the federal government running trillion-dollar annual deficits and spending a billion here and a billion there for various things, $2 billion might not sound like much money. However, $2
As I discussed in my January column, the U.S. economy was strong in 2019, with solid economic and job growth, and low inflation. Unfortunately, indicators suggest that Michigan’s economy was not as strong. Data on economic growth for Michigan in 2019 will not be known for several months, though data that is available indicate that
The U.S. economy had a good year. Despite numerous pronouncements that a recession was around the corner, the U.S. enjoyed strong growth in jobs and output. Economic output is on track to grow by 2.3 percent in 2019, compared to 2.5 percent in 2018. Approximately 180,000 new jobs per month were created in 2019, compared
The UAW-GM strike that began on September 15 and ended on October 25 was their longest since the 1970 strike, which lasted 67 days. Despite its length, the strike had minimal impact on the national economy. There were 128,000 new jobs created in September, which is similar to the 2019 average of 167,000 new jobs
The UAW-GM strike lasted 31 days before a tentative agreement was reached. It is unusual for work stoppages to last this long. Usually, each side has an idea of what the other will accept, which leads to an agreement being reached quickly. Why go through a prolonged strike, costing millions in lost wages and profits,
There is anxiety that a recession is around the corner. According to a recent ABC News poll, 60 percent of Americans expect a recession in 2020. Part of this anxiety is due to timing – since the end of World War II, there has been a recession approximately every seven years. The current expansion, which
President Trump recently escalated the trade dispute with China by imposing new tariffs and labeling China as a “currency manipulator.” It is unlikely that this escalation will be permanent, as President Trump has an incentive to bring the dispute to a speedy resolution. In the second quarter of 2019, gross domestic product (GDP) grew by
