The May 2020 jobs report could mark a turning point in our country’s struggle to get back on its feet after the Covid-19 pandemic. While some experts were bracing for up to 7 million more lost jobs, instead we got a pleasant surprise: 2.5 million jobs added and a 1.4% drop in unemployment.
The markets responded very favorably to this news. But with so many people still out of work and so many communities still struggling, it can feel like Wall Street and Main Street are way out of sync. So, on today’s show, we dig into some high frequency data that I think can help improve our perspective on where our economy is really moving.
Listen to the Episode
Simply "click" or "tap" on the "play" icon in the image below to listen to the episode. If you'd like to subscribe to the podcast using an Apple product (iPhone, iPad, iPod touch) click here to learn how. If you use an Android phone, we recommend using the Podcast Addict App, which can be downloaded here.
1. “Good and bad” vs “Getting better.”
As we’ve discussed on previous episodes, the impacts Covid-19 has had on business, society, health care, and politics are connected, but they don’t all move together. One of the best tools we have to get a handle on what’s happening in these various arenas is high frequency data, which is extremely specific information that’s collected in a defined time frame. Often the numbers themselves are instructive. And in other cases, looking for subtler movements within that high frequency data paints a more complete picture.
The May jobs report is a good example of how complicated this analysis can be. 2.5 million new jobs and a drop in unemployment are certainly positive numbers. But even with all those new jobs, we’re still looking at a very high 13.3% unemployment rate.
Still, while 13.3% unemployment is by no means “good,” this high frequency data shows us that employment is improving. Similarly, the most recent Covid-19 data does appear to be stabilizing across the country even as thousands of people are still suffering.
And that’s why the markets have jumped recently – not because we’re totally out of the woods, but because investors are starting to see some light.
2. Eating, travelling, and buying homes.
Here’s some more high frequency data that we’re keeping an eye on:
- TSA Daily Traffic: A year ago, the TSA reported approximately 2 million airplane travelers every day. Right now, the TSA is reporting around 300,000 daily travelers. That’s still low, but it’s a 450% increase on the April low of 87,000 daily travelers.
- OpenTable: The popular app and website for booking restaurant reservations is reporting that activity is only down 50% from a year ago in places that have started to reopen. That’s another low number that is really a positive sign when you consider most restaurants and bars that have reopened have occupancy limits.
- Hotel Occupancy: We’re currently seeing 43% occupancy, but that percentage also represents seven consecutive weeks of increased demand.
- Auto Sales: The U.S. Bureau of Economic Analysis estimated vehicle sales of 12 million in May, up 40% from April.
- Oil Prices: Remember when oil was temporarily trading in the negative? A month later the price of a barrel is rising over $40.
- Home Sales: Over the last 12 months, mortgage applications are up 17.5% and home prices are up 6%.
3. What have we all learned?
I know it’s been hard to sort through all the facts, figures, and opinions that have been swirling around during the Covid-19 pandemic and determine how the day’s news affects your finances. I hope that our discussion on high frequency data is a reminder that there’s always more to the economy – and your retirement planning – than what any one number shows.
But I also hope you’re starting to reflect on what you’ve learned in the last few months. Bear markets and volatility spikes are a given over the course of any investment cycle. No one predicted a global pandemic was going to disrupt so much of our lives and work in 2020.
You’ve lived through a truly unprecedented moment. In the weeks ahead, take some time to talk to your spouse about what this experience has been like physically, emotionally, and, yes, financially. Take note of what you’ve been seeing in the news, how it has or hasn’t affected your outlook, and how you’ve responded. Think about what the pandemic and quarantine have taught you about how the markets function and how you want to live your best life going forward. And let us know if there’s anything we can do to help you stay on that positive course.
Please share this page and the podcast with your friends and colleagues via Linkedin, Twitter and Facebook. You can use the share buttons. Thanks! Got a question or comment? Email it to me and we'll get back to you or call our office at (913) 624-1841.
Bill Keen is a CHARTERED RETIREMENT PLANNING COUNSELOR℠ and independent financial advisor with more than 25 years of industry experience. As the founder and CEO of Keen Wealth Advisors, a registered investment advisory firm, he specializes in providing personalized retirement planning designed to help people thrive before and during their retirement years. With a passion for educating others, Bill regularly blogs about retirement planning, hosts the podcast Keen on Retirement, and has contributed to U.S. News and World Report, Reuters, Wall Street Journal’s Market Watch, Yahoo Finance, and other publications. Based in Overland Park, Kansas, Bill and his team work with clients throughout the greater Kansas City area and across the nation. To learn more, connect with him on LinkedIn or visit www.keenwealthadvisors.com.
KWMG, LLC’s dba Keen Wealth Advisors (“company”) is an SEC Registered Investment Advisor located in Overland Park, KS. The company and its representatives may only conduct business in those states where registered or where excluded/exempt or from licensure. For registration information please contact the SEC or the state securities regulators for the states where the company is notice filed. A copy of the company ADV is available upon request. Advisory services are only offered to clients or prospective clients where the company and its representatives are properly licensed or exempt from licensure. No advice may be rendered by the company unless a client service agreement is in place. This information is not intended to be investment advice or construed as a recommendation or endorsement of any particular investment or investment strategy and is for illustrative purposes only. Clients and prospective clients must consider all relevant risk factors involved with each strategy, including costs or fees, and their own personal financial situations before trading.
The views outlined in the book, Keen on Retirement Engineering the Second Half of Your Life, are those of the author and should not be construed as individualized or personalized investment advice. Any economic and/or performance information cited is historical and not indicative of future results. Economic forecasts set forth may not develop as predicted.
The Amazon Best Seller ranking listed on marketing materials is specifically referring to Best Seller rankings for the Kindle Top 100 Paid Lists under the subcategories of: Budgeting and Financial Risk Management, based on data as of September 5, 2019. Amazon rankings although relevant on how a product is selling overall doesn’t necessarily indicate how well an item is selling among other similar items or similar item categories. Amazon may choose the most popular categories or subcategories within which an item has a high ranking to determine its best seller rankings. These rankings are updated hourly and as a result, should be expected to fluctuate as such. Keen Wealth Advisors and Amazon are not affiliated entities. For further details on Amazon rankings please visit https://www.keenwealthadvisors.com/important-disclosures.