Let’s Plan on a Slow Economic Recovery

Posted in , By David Robinson

A recent survey asked a group of macro quantitative economists to predict the likely trajectory of the US economy, as the US struggles to reopen. Our reservations aside about the futility of trying to predict too far into the future, this “expert” survey confirms my working hypothesis that the recovery will likely take years. There is a range of opinions, but over half of the economists foresee the US economy not returning to pre-crisis levels until the second half of 2022 or later. To use a medical analogy, the pandemic has been an economic heart attack. Yes, we expect full recovery, but the patient in recovery is going to need time, support and understanding.  Expecting a sharp recovery without plateaus or setbacks is wishful thinking, as far as I am concerned. Simply skimming the linked article will give you a sense of what economists are thinking for now, with survey updates planned. fivethirtyeight.com/

  • Powell’s View: Fed Chairman Powell is more optimistic, seeing the recovery stretching into 2021. His views carry weight with me, but he has no way of knowing for certain. New York Times
  • US Stock Market Rebound: The cheeriest outlook of all may be coming from the US stock market, which is a leading economic indicator. The S&P 500 Index is up approximately 34% from its March 23, 2020 low and is only approximately 8% below where it started the year. Whether the stock market will continue to recover itself or regress is also a big unknown but will depend in large part on whether corporate earnings begin to rebound at some acceptable pace. Stock market investors may be satisfied with positive movement in earnings beginning later this year or early next year even if the absolute numbers are less than stellar. It will not expect the “patient” to run quickly but will be looking for it to get up out of bed and start moving around. CNBC
  • Tracking Covid-19 Cases in the US: To understand how your state is doing relative to its population, use this interactive, up-to-date tracker, showing cases and deaths by state per 100,000 residents. CNN
  • The Race for a Vaccine: With potentially huge profits at stake, numerous companies are pushing as fast as possible to bring an effective vaccine to market. Here is an interview with a Johnson & Johnson scientist on their efforts. YouTube Dr. Fauci has expressed cautious optimism about Moderna’s vaccine news. Axios But would we take a vaccine if available? Some are skeptical. Portland Press Herald
  • When Will We Fly Again? The airline industry is reeling. How many people are going to fly unless they deem it necessary? At best this feels like a slow build up. And can airlines survive until they reach critical passenger mass? The linked article is a good read on the state of this industry.  New York Times
  • Pandemic Shopping Habits: We are shopping more online, buying more health and home products, and are more cost conscious. Will these trends persist? I will wager that the trend to online shopping will persist, as many consumers have learned a new way to buy or realized that a wide range of goods are available online. But the pandemic is the most obvious explanation of why we are buying more health and home goods. Likewise, are we more cost conscious because we have fewer choices on a temporary basis? If long-time favorite Angel Soft bath tissue is not available online, are we buying the less well known “Hope for the Best” brand in a semi-desperation move? CNN Business
  • A Deep Reset: Cal Newport, a popular blogger and thoughtful observer about work, suggests that the radical disruptive nature of the pandemic offers us an opportunity to do a deep life reset. Change is practically being thrust upon us whether we like it or not. What will we learn? How will our lives be fundamentally altered? Cal Newport
  • Adele’s Weight Loss and Sirtuins: As culturally insular as I am, I took note of Adele’s dramatic weight loss. Apparently, she had great success with the so-called Sirtfood Diet. Diet fads come and go, but the emphasis on eating foods that trigger sirtuin activity may be lasting. We have written about this before in the context of longevity research. InsideHook
  • 20 Best Comedies: Need a good laugh, along with some ideas for your evening entertainment? Try this article about the best comedies of the 2000s. Anyone a raving fan of any of the comedies on the list? Boston Globe
  • Peace and Beauty Outdoors: It feels fitting to close with this article on ideas for finding peace and beauty outdoors with many mentions of places in Maine and New Hampshire. May all of us find the time and opportunity to experience one or more of these or the countless other places comparable in scenic appeal. Boston Globe

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About the Author David Robinson

A wealth advisor with more than 25 years of experience in the financial field, Dave serves as Robinson Smith Wealth Advisors’ Co-Chief Investment Officer and is a Co-Managing Member of the firm. As a Certified Financial Planner® and non-practicing attorney, he provides clients with deep expertise in areas including investment management and retirement planning.
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