It seems pretty obvious, at least in hindsight. Reopen the economy, give people cash, roll out effective vaccines, and job growth would soar. But an April 6 headline in Bloomberg News, U.S. Jobs Come Roaring Back, Surprising Employers and Economists, reveals that the experts were caught flat-footed.
The U.S. BLS reported nonfarm payrolls soared by 916,000 in March.
Two key measures of the manufacturing and service sectors provided by the Institute for Supply Management came in well above expectations in March.
- Manufacturing—best reading since the early 1980s
- Services—best reading ever
It’s good news—but why is it occurring?
The pandemic has created distortions in the economy that have aided some sectors and hurt others. One sector that has benefitted enormously has been housing. Sales have been strong, housing construction has accelerated, and housing prices have soared.
It’s been one year since Covid was declared a pandemic. What have we learned? Time-tested financial principles have served us well.