In a major surprise, the US unemployment rate dropped in May to 13.3% from the 14.7% rate in April. Some economists had predicted that the rate would climb again in May and might reach 20%. We question the seeming disconnect between the number of people filing for unemployment insurance and the number counted as unemployed but otherwise have no reason to doubt the accuracy of the data. This is good news. FiveThirtyEight Axios
The unemployment rate is a crucial economic metric. While it lasts, unemployment insurance mitigates the financial risk, but the unemployed are financially vulnerable and some may also suffer emotionally, creating health and psychological risks. A high unemployment rate lessens economic demand for goods and services, hurting the entire economy and the broader community. The unemployment rate is the best indicator of how well the economic engine is performing.
- Economists Are Somewhat More Optimistic: Two weeks ago, we brought a survey of 34 economists to your attention. We like this survey, conducted jointly by the University of Chicago Booth School of Business and FiveThirtyEight, for its objectivity and methodology. Moved by the May job news, these economists are now slightly more optimistic than two weeks ago. There is no consensus for a quick bounce back, however, causing us to stick with a relatively slow recovery scenario assumption. FiveThirtyEight
- Schwab Mid-Year Market Outlook: Turning to investments, Schwab's excellent team of economists and strategists produce an investment outlook at the beginning of each year and then at the mid-way. The 2020 mid-year outlook has also turned more optimistic although they note the need for investor caution. Among the take-aways, the countries that were quickest to respond to the virus by locking down are rebounding more quickly. We like the way Jeffrey Kleintop, Schwab’s Chief Global Strategist, has developed a series of data points to track the global economy, independent of government data. Schwab 2020 Mid-Year Outlook
- When Do Epidemiologists Expect to Fly and Hug? Curious when the infectious disease and medical data geeks expect to resume normal lives? The New York Times surveyed a group of 511 epidemiologists and infectious disease specialists, asking when they expect to resume 20 activities of daily life, if the pandemic and the public health response to it unfold as they expect. They are a cautious group. For example, 42% believe that it will be over a year before they hug or shake hands with a friend, and 64% believe that it will also be over a year before they will go to a play, concert, or sporting event. New York Times
- Maine Bond Ratings Affirmed: The credit rating agencies recently reaffirmed Maine’s strong bond ratings. The pandemic is putting stress on Maine’s revenues and expenses, like all other states, so this confirmation of sound financial footing is heartening. Portland Press Herald
- The Coronavirus and Nasal Breathing: Based on recent reading, we should be breathing through our noses and not our mouths. Slower and lighter belly breathing is best. Another reason to favor nasal breathing is that the nitric oxide produced by our sinuses may mitigate the severity of Covid-19 (but talk to your doctor about this). ScienceDirect NPR Interview With James Nestor
- Let’s Hear It for the Telephone: In recent practice management reading, I came across an article extolling the virtues of telephone calls vs videoconferencing. The article cited research that our ability to detect nuanced meaning is greater on a telephone call when there is no visual distraction. It even suggested that phone calls may be more effective than some in-person meetings (not ready to go there yet). As someone most instinctively comfortable communicating in person or by email, this rocked my communication world, in a manner of speaking. There is academic research backing this counter-intuitive notion. American Psychological Association Berkeley.edu
- Three Entertainment Recommendations: David Ignatius, the venerable Washington Post reporter and thriller writer, recommends his six favorite spy novels. Ignatius knows his stuff. The Week A good friend recommended Martin Walker’s Bruno: Chief of Police mystery novels set in rural France. I am blazing my way through them. www.brunochiefofpolice.com/. If it is movie watching you crave, Annie and I are on our third season of Medici: The Magnificent, a historical drama centered in Florence, one of the world’s great cities.
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