The US economy is once more demonstrating its resilience. The S&P 500 has bounced back to just 5% below its all-time high. Current GDP estimates for the second quarter imply that coronavirus shutdowns reduced the economy’s productive activity by about 17%.
The fact that they have now begun to lift means that real GDP has passed its low point. Employment rose by 2.5 million jobs in May, but the unemployment rate still exceeds 13% and further declines will be much slower than gains in output. Washington will be under intense pressure to continue and boost debt-finance transfer payments.
Most Stock markets have been climbing back, but few as rapidly or completely as in the United States or Switzerland. Elsewhere in the world, lack of economic resilience is likely to accelerate the long-term flight of capital into free-market economics.
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Speaker
R. David Ranson
R. David Ranson is director of research at HCWE & Co., an independent investment research firm now located in Cambria, California. Originally the economic-investment research arm of H.C. Wainwright & Company of Boston, Massachusetts, Wainwright Economics became an independent operation in 1978 and has since been renamed HCWE. Prior to becoming a general partner of H.C. Wainwright, Mr. Ranson joined Director George P. Shultz’s personal staff at the Office of Management and Budget, served as an assistant to then Treasury Secretary William E. Simon, and taught economics at the University of Chicago Graduate School of Business. He is a Senior Fellow with the National Center for Policy Analysis in Dallas and a Fellow of the Institute for Applied Economics, Global Health and Business Enterprise at Johns Hopkins University in Baltimore. Ranson holds M.A. and B.Sc. degrees from Queen’s College, Oxford, and an M.B.A. in finance and a Ph.D. in business economics from the University of Chicago.