Fishkind Conversations: Is The COVID-19 Recession Over?
May’s U-S unemployment report showed a surprising drop to 13.3%, better than expected.
But economic analyst Hank Fishkind tells 90.7’s Nicole Darden Creston that the nation still has a long way to go, and Florida’s path to recovery is even longer.
Nicole Darden Creston: So Hank, with the May rebound, is the COVID-19 recession over?
Hank Fishkind: Yes, it is. And in fact, a few months earlier than we expected, Nicole.
NDC: So is this the beginning of a strong rebound as we've been hearing from certain sectors?
HF: Regrettably not.
NDC: Why not?
HF: Well, the main job search came mostly from a big rebound and leisure and hospitality jobs, they jumped 1.2 million following that decline of seven and a half million in April. So we got back about 16% of what was lost. And that just demonstrates it's gonna be a long road back, you know, until there's either a widely distributed vaccine or an effective treatment, the economy's gonna get stuck in low gear, as social distancing remains necessary. And there's a significant risk of a rebound and infections too, and that's already beginning to show up in the data.
NDC: Tell me a little bit more about that.
HF: Nationally, new cases still remain above 20,000 per day and the rate of positives per test has crept up higher. Now it's still below the 10% threshold. But it's noticeably rising, Nicole, and it should be going down.
NDC: Something to keep an eye on for sure. Now, what about the May data for our economy?
HF: Well, the main jobs report for Florida is not going to be released until later this month. But it's not going to show any increase. In fact, there's going to be another loss of almost a million jobs in Florida. And the unemployment rate in Florida is going to surge well over 15%.
NDC: Now, why do you say that?
HF: Well, the data on new claims for unemployment compensation statewide nearly doubled in May to 845,000 from 518,000 in April, and the news is even worse in Orange County, whose May claims jumped to 84,000 from 50,000 in April, and claims rose all across Central Florida as you would expect, given the high level of tourism and related hospitality jobs that dominate our marketplace.
NDC: Now when do you expect Florida's job markets to show some improvement?
HF: Well, things are gonna slowly improve here in June and July, as the parks and more businesses open up. But with that comes again an increased danger of higher risks of rising cases. And the recent data, even in Florida is not very encouraging about that.
NDC: So tell me more about that
HF: New cases have rebounded to over 1000 new cases per day over the last almost week, and more ominously, as testing is ramped up, the percentage of new cases has actually begun to rise again, Central Florida's data showing much the same thing, but fortunately at lower rates, but the trends are not very encouraging.
NDC: Hank, what surprised you the most about last week's economic reports?
HF: Well, the big rebound in new home sales was very surprising, and sales in Florida were particularly strong. And this is very encouraging because it indicates that people are willing and able to continue to buy new homes in Florida, even given all that's going on in the economy.
NDC: What worries you the most?
HF: Well, two things, you know, first, with the beginnings of recovery, some in Congress are of the mind that no more stimulus is going to be needed. And that's just not correct. State and local governments laid off another half million people last month and they're in dire need of support. And by August, most of the increase in jobless benefits and PPP and other things are going to expire. But the unemployment rate is still likely to be above 10%. And many businesses will be operating at very slow speeds. So a lot of businesses and people are still going to need help, as are state governments, and second I'm becoming more concerned about a rebound in infections as reopening expand across the country, Nicole