Merrill sammenligner med tidligere økonomiske nedture, f.eks. finanskrisen, og konkluderer, at dette års genopretning er gået langt hurtigere end ved tidligere recessioner, og det har overrasket økonomerne over en bank. F.eks. har hjemme-arbejde hurtigt fået mange virksomheder igang, og det ses også i en stor stigning i virksomheders køb af it-udstyr. Det er andre sektorer, der er ramt denne gang. Coronakrisen er en naturkatastrofe, og den har ramt samfundet anderledes end traditionelle recessioner, og nogle sektorer har ligefrem fået gavn af krisen. Det ses også af de meget forskellige reaktioner på aktiemarkedet. Stimuli-pakkerne har også haft en betydelig efekt, og de varer ved langt ind i det nye år.
Rapid Recovery Surprises Economists
Throughout the past six months, the speed of the recovery from the widespread spring shutdowns has consistently surprised economists on the upside.
The “V-shaped” recovery was not the expected outcome. There is still a widespread view that without additional stimulus the strengthening U.S. economy will likely falter in the months ahead, given the surge in coronavirus cases threatening to further slow reopenings in certain parts of the economy.
It’s not unusual when an economy comes out of a recession for forecasters to remain
overly pessimistic. For one thing, that’s when conditions are at their worst, with
economic activity at a multi-year low point at the end of a recession.
Even as the economy begins to recover, it’s easy to dismiss the improvements when you’re still well below earlier levels of activity. Nevertheless, the speed of improvement this time around remains much faster than forecasters had anticipated.
For example, the outlook for Q3 gross domestic product (GDP) growth at the end of July was around a 10% annualized rate and moved progressively higher over the next three months before coming in just over 33% when the Bureau of Economic Analysis reported its first official estimate.
Economists have already dismissed this unprecedented record rise as water
over the dam and focused their attention on a gloomy outlook for the months ahead as coronavirus cases continue to increase and further stimulus remains stalled in Congress.
In our view, this persistent underestimation of economic strength absent additional
large fiscal stimulus may continue for several reasons.
First, pundits have massively underestimated the effect of the initial stimulus, which was the biggest since World War II. The effects of that stimulus are likely to keep growth strong well into 2021 even without another dose of fiscal policy.
Second, the signs of a new synchronized global expansion continue to proliferate as other countries have also resorted to strong fiscal and monetary expansion.
Focus on coronavirus cases and the need for additional stimulus measures has kept attention on the negatives and caused insufficient attention to the growing evidence of a strengthening global economy.
Indeed, the continuing devastation in certain areas of the global economy makes it easy to find pockets of extreme weakness and to overlook the areas of impressive strength.
Still, it’s the overall size of the pie that best describes the net outcome of these
unusually diverse positive and negative effects.
A look at this mix in the entrails of Q3 U.S. GDP helps provide perspective on the outlook for 2021.
The most pronounced difference in GDP growth since the pandemic hit is clearly the
unprecedented differential between goods and services.
In past recessions, it was typical for goods sectors like Automobiles, Housing and other big-ticket Discretionary purchases to bear the brunt of the downturn, while service sectors held up much better, aided by their stronger relative growth trends as they accounted for an increasing share of GDP.
This is the first recession with goods spending outperforming services. For example, at the end of the Q3, spending on motor vehicles and parts, as well as residential investment, surpassed their late 2019 peaks by about 8% and 5%, respectively.
In other words, the economic recovery from the recession low point in these sectors took only three months.
Contrast that with the recovery in these sectors after the 2008–2009 recession. Motorvehicle spending began to decline in the first quarter of 2008 and did not exceed prerecession levels again until 2015.
Similarly, residential investment spending, which began to decline when the housing bubble popped in 2006, declined continuously thereafter until 2012.
In short, these key cyclical sectors took many years to recover from the Great
Financial Crisis (GFC). This time around, they took just a few months.
This illustrates a critical difference between this pandemic recession and past recessions.
As discussed in recent Capital Market Outlook reports, this was more like a natural disaster.
The shutdowns hit and then they were gone, while unprecedented stimulus fueled the
recovery of an otherwise healthy economy, setting the stage for the fastest, strongest
recovery on record that economists are still having a hard time accepting.
Importantly, work-from-home (WFH) and flight from congested urban areas have added a new structural-trend element to housing and auto demand that accelerated their recovery.
It has also made information processing equipment a bigger priority. Q3 GDP statistics show business spending on information technology equipment has surged almost 15% above fourth quarter 2019 levels.
As the economy transitions to this new WFH environment, investment spending is growing at a double-digit rate as reported by the latest GDP report
and Atlanta Fed GDPNOW .
This strength in goods purchases is driving the early stage of the current expansion and helping improve cyclical stocks’ relative performance.
