Opinion | After a horrific month in which nearly 21 million Americans lost their jobs, why is the stock market still going up? By hblodget.
also dropped to a record low. Only about half of Americans — 51% — are employed right now. The peak of this measure was about 64% in 2000.2.5 million health-services and education workers lost their jobs.The only bright spot is that about 18 million of the 20.5 million job losses are considered temporary. At least for now, these folks think they'll be rehired when the economy improves.
This devastating jobs report raises a reasonable question that has come up often in the past few weeks:Back in February and early March, as the pandemic ravaged one industry after another, the stock market plunged by a third in five weeks.And yet, since bottoming in mid-March, the stock market has risen steadily. Now, six weeks later, it has recovered about two-thirds of its losses and is not far below its all-time high.
Second, the government's fast, aggressive financial response to the crisis — in the form of emergency aid packages from the Treasury and Congress and emergency liquidity from the Federal Reserve — has significantly limited the potential economic damage. The government aid packages haven't saved all jobs , and they won't save all US businesses, but they've helped save a lot.
In fact, one of Wall Street's best economists, Jan Hatzius of Goldman Sachs, estimates that the various forms of government aid — including enhanced unemployment benefits — will actually more than offset the income Americans have collectively lost this year. This aid will not be shared equally, so there will still be plenty of individual pain, but, in aggregate, a lot of the economy's consumer spending should be maintained.
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