This working whitepaper is about 1 month old (from the data used) but holds a couple of interesting take-aways.
I have to give credit to the authors for their attempt to use data and academic rigor to articulating a possible post c-19 jobs picture. It’s not an easy read, and I came away with two key points to help my portfolio management.
First, the post c-19 recovery is probably going to take longer than current equity prices assume. This article suggests 2H ’21 the earliest GDP could return to pre C-19 levels; but that does not suggest nor imply same levels of employment, revenue and profit – currently unknowable?
Second, a number of 77% of lost jobs are assumed to be either kept, returned or relocated. That leaves 23% lost until economic growth creates them … sometime AFTER 2H ’21 based on above. The absolute numbers are less important than the levels (~20% lost jobs) and one can easily do the math.
If the authors analysis and assumptions hold, then consumption driven activity will be reduced by some number close relative to that 20% – and, higher government support for unemployed, underemployed … discretionary spending will take a hit almost certain and local governments will be further stressed.