May 2020 Economic Update

Unprecedented Times

May 14, 2020


Public Trust Trading Desk

As confirmed cases of COVID-19 in the U.S. more than doubled during April from 600k to over 1.3 million, economic data covering the early stages of the “Great Shutdown” was released and proved to be as catastrophic as anticipated. To be sure, phrases such as “unprecedented” and “worst on record” have become all too common and will remain frustratingly unavoidable in economic commentary in the weeks and months ahead as the brunt of the pandemic’s economic costs are realized.

Reflecting the early impact of pandemic-related lockdowns, the advance estimate of first-quarter GDP showed the U.S. economy contracted at a -4.8% annualized pace, marking the end of the longest economic expansion in U.S. history and signaling the beginning of what will likely be the deepest U.S. recession since the Great Depression. According to a Bloomberg survey of 63 economists, the median forecast for second-quarter growth is an unsettling -27.5%.

Among the most startling economic data released in recent weeks is that from the labor markets. Mirroring the unprecedented increases in weekly claims for unemployment benefits, the Bureau of Labor Statistics reported that the U.S. economy lost a staggering 20.5 million jobs in April. For perspective, U.S. firms shed a total of 19 million jobs during the last seven recessions combined. The magnitude of April’s job losses pushed unemployment to 14.7%, far surpassing the previous post-WWII era high of 10.8% set in November of 1982.

Reflecting the global nature of the COVID-19 pandemic, oil prices turned briefly negative for the first time in history as the collapse in demand accentuated by the “sudden stop” in world economic activity collided with growing oversupply issues and strained storage capacities. While oil prices have since rebounded back into positive territory, the plunge below zero reinforces the initial deflationary impulse of COVID-19 that policymakers struggle to combat. Looking ahead, the economic and market outlook remains heavily tied to the evolution of the virus and the actual public response to re-opening efforts. These efforts must be balanced against the public health concerns related to the premature lifting of mandatory business closures, shelter-in-place orders, and other social distancing policies.

Current Economic Releases

GDP QoQQ1 ’20-4.80%
US UnemploymentApr ’2014.70%
ISM ManufacturingApr ’2041.50
PPI YoYMar ’20-0.90%
CPI YoYApr ’200.30%
Fed Funds TargetMay 12, 20200.00% – 0.25%

Treasury Yields


Agency Yields


Commercial Paper (A1/P1)



Source: Bloomberg
Data unaudited. Many factors affect performance including changes in market conditions and interest rates and in response to other economic, political, or financial developments. Investment involves risk, including the possible loss of principal. No assurance can be given that the performance objectives of a given strategy will be achieved. All comments and discussions presented are purely based on opinion and assumptions, not fact. These assumptions may or may not be correct based on foreseen and unforeseen events. The information above is not a recommendation to buy, sell, implement, or change any securities or investment strategy, function, or process. Any financial and/or investment decision should be made only after considerable research, consideration, and involvement with an experienced professional engaged for the specific purpose. Past performance is not an indication of future performance. Any financial and/or investment decision may incur losses.

Previous Monthly Reports

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April 2020 Economic Update

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03 - Monthly Economic Update

March 2020 Economic Update

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February 2020 Economic Update

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