Jeff Miller has been a professor, economist and financial advisor. He helps people manage investments from his retirement community in Arizona.
One of his current ventures is Dash of Insight. Jeff writes a weekly “Weighing the Week Ahead” article that helps me understand what’s happening in our world and in our markets–no small achievement these days.
This week’s installment includes a chart about COVID-19’s spending impact that Jeff sifted from Harvard University by way of Statistica. I’m now passing it on to you.
The 0% line represents U.S. consumer spending for the same period in 2019. The red line represents spending this year. Notice the sharp drop between March 15 and April 1, and how spending languished more than 30% below last year’s spending until the U.S. Treasury and the Federal Reserve began their massive effort to prop up the economy through unemployment benefits, stimulus checks and loans to businesses.
We’re still 8.9% below the 2019 level. Here’s the Old Prof’s summary:
“Stock market strength has provided a false sense of security. … Few investors have considered the actual downside risk in their portfolios.
“There’s a good solution ahead. It might be a vaccine, but more likely will be a combination of partial solutions–social distancing, regulations, testing, tracing, and a slower pace of reopening. Individual effort will help but leadership is required. I cannot force my fellow shoppers to wear a mask.”