Is the US economy about to bounce back?
Nearly three months ago, the stock market hit its lowest point since the election of Donald Trump. Over 30 days ending on March 20, the Dow Jones Industrials Average lost a staggering 10,000 points, or some 30 percent of its value. Those were the early weeks of the coronavirus pandemic in the United States, and many investors decided to sell, even at a loss.
Less than three months later, the reality is entirely different. Last week, the Nasdaq rose to its highest level ever, buoyed by improving jobs numbers and an uptick in consumer spending.
At the same time, the United States is officially in a recession, the unemployment rate remains at 13.3 percent, and economists are expecting disappointing profit numbers from large corporations. So what gives? How can we have a booming stock market and an anemic economy?
A few weeks ago, we speculated about the shape of the post-coronavirus recovery. Would it be U-shaped (slow recovery), L-shaped (protracted downturn), or V-shaped (a sharp rise to pre-coronavirus levels?) Increasingly, economic indicators point to the latter, but there’s no clear consensus.
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