Benjamin Gordon Palm Beach highlights the impact of the pandemic on the global economy
The past two years were either a year to remember or to forget! With the severe pandemic outbreak, widespread political demagoguery, and civil unrest, discovering the truth has been challenging says Benjamin Gordon Palm Beach. Irrespective of that, there has been a lot happening in the global economy. In this article, we will throw light on the impact of the virus on the worldwide economy as well as the financial markets.
Benjamin Gordon Palm Beach talks about the global economy
Before the pandemic hit, the U.S economy was in a great state. The unemployment rate was low, and inflation was beneath the Fed’s target of approximately 2.0%. And since a crucial part of the United States economy got closed down, the real growth of GDP declined during the second quarter by almost 31.4%. You will not find this number in the Great Depression.
The unemployment rate skipped to a high and went up to 14.7% last year. According to estimates, even though the rate fell down for five consecutive months, it is still beyond 3.5%. However, the ones that furloughed from the hospitality, airline, and leisure industry, often wonder if there will be any help.
The United States economy gets mainly driven by customer spending. Hence, when the customers spend, the organization’s profit and the global economy are in good condition. Currently, there are about 6.8 million unemployed workers. Is it possible for the worldwide economy to flourish with all this sideline? The answer is probably not. And one can only assume that Washington might pass another stimulus bill that will save customer spending from falling without help. Even them, the risk of waiting is very long.
It’s a clear indication that the labor market will get changed totally. Initially, the corporations were adding on technology for their workers. However, currently, the process has intensified. It can also speed up because the organizations want to increase profits. Also, with so many people who are working from home, some companies will carry on with this practice, thereby bringing the demand for commercial real estate. And this depletion of demand can lead to a reduction in the CRE costs and lease rates. Finally, several organizations have already closed. It has propelled the employees to come across other job scopes. And since more workers are seeking jobs, it can generate a labor market that can favor the employer and result in reduced wage growth.
The financial market
Benjamin Gordon Palm Beach reports that the United States stocks rose up for s while, remained steady, and then fell more than 37%. Right after that, the stocks also increased substantially till they again peaked back on September 2, 2020. Here it is necessary to know that the stocks, which also include the overall United States market, got 58% overvalue. Also, by September 2, the stocks were 87.5% overvalued, which was the highest number ever, moving beyond the Tech Bubble back in March 2000, when the stocks got 49% overvalued. The bond yields are a favorable indicator of economic expectations. Also, when the global economy struggles, the Treasury yields can fall, and the reverse is also true.