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I don't think it should be underestimated how much the CARES Act and the fairly generous stimulus it provided has blunted the economic impact of COVID-19 for the average American. And this has relevance for some of the debate about how economic data is used to forecast elections.
The economic index we use in our model has 6 components:
—2 of them (inflation, stocks) have been basically "fine" despite coronavirus
—3 (jobs, consumption, production) have been absolutely awful.
—The 6th (disposable income) has been MUCH BETTER THAN USUAL because of CARES.
—2 of them (inflation, stocks) have been basically "fine" despite coronavirus
—3 (jobs, consumption, production) have been absolutely awful.
—The 6th (disposable income) has been MUCH BETTER THAN USUAL because of CARES.
Usually, what I think of the "core 4" indicators (jobs, consumption, production, income) move in tandem.
In our index, if income looked like the other three metrics, the overall index would reflect near-Depression level readings. A bit better than 1932/Hoover, but not by much.
In our index, if income looked like the other three metrics, the overall index would reflect near-Depression level readings. A bit better than 1932/Hoover, but not by much.
Instead, with the government having put so much money in people's pockets, the index looks more like a league-average recession, which (since most indicators are now improving and/or expected to improve) is now become milder.
