Has the economy already bottomed?
Bottom Line: The answer to both of those extremely important questions may be yes. While I’d recently been nervous that weekly job losses were still rising as states were entering reopening, including in Florida(and I still am), there’s new research from LinkedIn and Microsoft – it's parent company - suggesting we might have turned a corner. According to LinkedIn Data, the day hiring peaked was March 3rd. On March 3rd hiring was up 25% year over year reaching record levels. It was nearly straight down from there. By April 15th hiring had declined 38% year over year – a stunning 63% reversal in less than a month and a half. Keep in mind many essential businesses have been aggressively hiring during the pandemic and these numbers factor that in. It’s the sharpest/quickest decline in recorded American history. But the extent of the bad news seems to get better from there.
By May 4th hiring was down 34% year over year. That’s a 4% improvement over mid-April. It also suggests the peak of job losses compared to hiring's happened in April. It doesn’t necessarily feel that way when we continue to hear of millions of Americans filing for unemployment each week, but what isn’t reported weekly are new hiring's. It appears likely that most recently, more people are starting to be hired than fired in a given week. Now not all jobs are created equal. What we don’t know about those finding new employment is what these jobs are paying compared to what these employees were earning previously. That will take time and the BLS’s presentation of the May Employment Situation report will he to sort it out. But if this data continues to hold or improve, especially with most of the country now at least somewhat reopen, there’s room for optimism that we’ve put in a bottom and can make progress from here. It just might not feel like it because the job’s market is still 59% worse than it was prior to the pandemic’s toll on our economy. It’s almost hard to believe it all happened inside of a month and a half.
Stopping the bleeding is the first step, hopefully that’s what’s happened. It’s important that especially small business owners have confidence that the tide is turning and it’s safe to take risks with capital to grow their business once again. A real recovery isn’t possible without that dynamic. That’s especially important in South Florida where we’re the fourth most negatively impacted economy in the country due to our reliance on travel and entertainment industries (which have been the most devastated by the pandemic). If the bottom is behind us and we’re just starting to reopen, there’s room for optimism from here.