US Economy Poised for Recovery
December 25, 2020
It’s our 100th episode! Have you subscribed to ITR’s TrendsTalk yet? This week, CEO and Chief Economist Brian Beaulieu recovery trends and what to expect in 2021 – don’t miss it!
Transcript by Rev
Hello. Thank you for joining us for our 100th trend start. This is a biggie, and we've come in at holiday season and I want to bring a present to all of you. I am Brian Beaulieu, CEO and chief economist for ITR Economics. And thank you for joining us. The present is this. I was reading a news article recently, and it was talking about how there's 20 million people unemployed in the United States because of COVID and that was justifying all sorts of fairly aggressive behavior on the part of the government to keep us from falling back into a recession. And that got me wondering, where are they getting those numbers? So I went scouring around for those numbers because they quoted the Bureau of Labor Statistics, which is where I used to work before I joined ITR Economics back in 1983.
And so I know the BLS fairly well. I know the work that they do, and I went scouring for those numbers and folks, I can't find where they come up with those incredible numbers. The reality is that since the worst of it in terms of unemployment, and that would have been in April of this year, March is when things started going awry. April is when we started shutting down, but if you look at the number of people unemployed today, there's 10,000,264, and that's a lot of people, but that amounts to a 6.4% unemployment rate, as opposed to the 14.6% we had back in April as an unemployment rate. And prior to COVID, we had 6,218,000 people who were unemployed. Remember pre-COVID, we were running at what we thought was, really economically was, full employment, 6 million people out of the size of our labor force is running at full employment.
There's always people in transition, there's people who really don't want a job, there's people who don't have the skillsets, they're structurally unemployed, and it was hard to find people. So that means here we are in, well, it's December, but I'm using November data. And the net is 4,046,000 people who are still unemployed because of COVID. I'm not dismissing how many people that is. That's still a lot of people, but I'm amazed at how many have been reabsorbed into the marketplace. And so to get a better handle on that, I look at the employment data and 13.9 million people have been reabsorbed into the private sector. We tend to not look at government employment at ITR Economics because our clients are in the private sector. We don't do any government work. So whether that's manufacturing or services or distribution really doesn't matter as long as it's in the private sector.
And that's a 12.9% improvement in employment since [inaudible 00:03:26]. Now we're still below, obviously wherever we were before COVID because unemployment number is still 4 million people who don't have their jobs back. But I just wanted you to understand that we are reabsorbing people at an incredibly rapid pace, and that's likely to continue. Now, there's always the overarching concern that we share with you about, now it's a new strain of COVID threatening. We're still in this foot race between the vaccine and COVID and COVID mutating and how we're going to handle it. We get that, but the economy is moving in the right direction. And if the medical scene continues to improve, and the holidays are going to mess that up, we all accept that, I think. It's not going to be fair to judge how things are going in January on a health scene.
But if they continue to go as we think they're going to go, this economy of ours is poised to recover. The unemployment rate is low. The number of people who are still unemployed is relatively low and we are hiring people back. And at ITR Economics, we just don't want you to be late to that party. We want you to understand that if you have a need for some key positions, you don't have the luxury of waiting 12 months to go out there and fill that position. Look at your cash flow. Look at your own expectations. Look at what your markets are likely to do. And you can do that through the material we provide at ITR Economics and be prepared to make a move. We're drinking our own Kool-Aid. At ITR Economics, we're hiring five people because we've had to do some pivoting ourselves with some skill skillsets that we need.
And we know that the body count out there, the labor pool, is not all that deep. And so we're making our move while the going is good. And we encourage you to just think along those same lines also. Don't be timid about this future. COVID will pass. The economy will rise and you should be ready to rise with it [inaudible 00:05:40]. A lagging indicator or move with GDP, or you're a leading indicator. If you're in housing, I don't even need to tell you how good things can be. If you're in non-residential construction, you're a lagging economic indicator and you need to take it cautious. But if you tend to move with GDP, with US industrial production, with manufacturing, you're about to have a rebound in 2021. And we just want you to be ready to capture everything that the economy has to offer you. That's our present to you. This is a good-news message. This is, we're getting better. And we're really feeling upbeat about what 2021 is going to offer most of us, anyways, as we go through the year. Take it, enjoy it. 2020 is mercifully almost behind us. Let's get going with 2021. Thank you for joining us for our 100th trends talk. This is cool. I'm Brian Beaulieu. Happy holidays.