by Robert Romano
The U.S. economy produced between 1.35 million and 1.8 million jobs the month of July, bringing the total number of jobs created since April when labor markets bottomed with the federal and state governments in lockdown to combat the Chinese coronavirus to between 9.3 million and 10 million.
Further speeding the recovery along are the number of COVID-19 cases are beginning to decline nationally after brief spikes in Texas, California, Florida and Arizona as states were reopening. Now the cases have stabilized in those states, and the Institute for Health Metrics and Evaluation is projecting they will remain stable until mid-to-late September when the cold and flu season gets going again.
And almost nobody but President Donald Trump was thinking that a recovery could happen this quickly. On March 25, the President predicted, “I don’t think it’s going to end up being such a rough patch. I think it’s going to, when we open — especially, if we can open it — the sooner, the better — it’s going to open up like a rocket ship. I think it’s going to go very good and very quickly.”
President Trump was right. After April, it looked like the U.S. had entering another Great Depression with 25 million jobs lost in the blink of an eye, but now it’s almost practically halfway back.
That is simply incredible.
It’s a dramatic turnaround, when in March health experts were projecting that as many as 2 million Americans would die if nothing was done.
Now, almost all of those lives have been saved the worst of the virus appears to be past us, and the economic damage may not be nearly as long lasting as many including this author had worried.
It took the Obama economy almost five years before it recovered the 8 million jobs lost in the financial crisis and Great Recession.
The Trump economy in contrast has beat the Obama pace of recovery in just three short months—May, June and July — in an unbelievable recovery with millions of Americans chomping at the bit to get back to work. The biggest gains the past three months have been in retail, leisure and hospitality, education and health care.
Adding to the good news, the week of July 25, another 965,000 Americans left unemployment benefits on an unadjusted basis, with 323,330 leaving continuing unemployment claims in California, 99,653 in Florida, 97,320 in Michigan, and 118,020 in Pennsylvania, according to the Department of Labor. After continued volatility in the continuing claims numbers, it now appears that the economic momentum will continue into August.
In part, this is a testament to the President’s and Congress’ foresight in adopting the payroll protection for more than 5.1 million small businesses totaling $523.4 billion according to the Small Business Administration, as well as key supports for larger businesses, critical industries and state and local governments. Relief was also offered via temporarily expanded unemployment and checks to every taxpayer in the country.
That now appears to have been instrumental in fueling a speedy rebound beyond almost all expectations.
On the political side of the equation, Democrats will be worried the recovery will continue accelerating through Election Day in November and might help Trump politically.
A Politico story in May quoted a former Obama official saying a rapid recovery economically and from the virus “is my big worry… It’s high — high, high, high, high.”
The Obama official was responding to an early April presentation by Jason Furman, a former Obama administration economist who, like Trump, predicted correctly: “We are about to see the best economic data we’ve seen in the history of this country.” Furman was right, too.
And after a dismal second quarter that saw a record 32.9 percent contraction of the Gross Domestic Product, this is surely great news for the American people.
The one thing that might kick it into high gear would be a rapid turnaround of a vaccine or some other effective treatment to prevent the virus from being so deadly. And with the phase three clinical trials for the Moderna vaccine, mRNA-1273, that began on July 27, that may be just the ticket to get the U.S. economy roaring back this fall. Stay tuned.
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Robert Romano is the Vice President of Public Policy at Americans for Limited Government.