2020: A year to remember!
The year 2020 has left a mark in history and will be remembered for countless years to come for what it has brought the world. The outbreak of the COVID-19 pandemic has rattled the world, resulting in high death tolls and irrecoverable damage to the global economy.
The economy and the financial markets amid the coronavirus are a hot topic of discussion around the globe. The virus was completely new to mankind and provided an ideal setting for the minds who want to spread misinformation. This has left the world busy finding the root cause of the virus, how does it spread, and the necessary precautions that should be taken to avoid the forecasted disaster.
What is important? Is human health more important than economic health? This question has also become a hot topic of discussion amid the pandemic. The importance of either of the two is undeniable as they are interdependent. The President of the U.S, Donald Trump is of the belief to reopen the economy as early as possible, whereas, the opposing side, the democrats, are of a different view. They would like to be more cautious, siding with the overwhelming number of recommendations from physicians across the country.
Racial unrest in the country is also rising due to the unjustified killing of multiple African Americans at the hands of the Police, only adding more fuel to the nationwide flames.
The U.S economy was enjoying a good pace prior to the pandemic. The unemployment rate was at the lowest in the past fifty years and a similar case was with the inflation that was below the Fed’s target of 2.0%. However, the pandemic has hit America so hard that the real GDP growth of the US has fallen by an astonishing 31.40% in the second quarter. Such depressing numbers have never been witnessed since the Great Depression nearly a century ago.
In the US, unemployment has spiked to an alarmingly high rate and is well above 3.5%, as of the February reading. Being a consumer-driven economy, it is not possible for the U.S to flourish its economy with 6.8 million more workers that are unemployed in comparison to the figures of February 2020. It is certain that the pandemic is going to change the labor market forever. Many companies have closed their operations, leaving their workers unemployed. So, when a large number of candidates will seek opportunities that are less in numbers, it will result in a market that will favor the employer only.
The behavior of the Financial Markets
The US stock market fell over 37%, with the least on March 23. However, afterward, there had been a substantial rise in the stocks and it reached a peak on the 2nd of September, 2020.
The November election is on its way and it might bring an increase to the market fluctuations. It is also very imperative to see the behavior of the virus in the fall and winter; it is going to be crucial. We have to see if we can come up with any treatment or vaccine that can put a stop to the virus. If we fail to do this and if the outbreak worsens, we need to expect a shutdown, and it is going to be tough.