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We all know 2020 has been off-the-charts crazy. Regarding the markets and economy, it’s been one for the record books. In the first half of this year, we’ve witnessed things we might not see ever again!

We’ve comprised 13 charts to prove just how insane this year has been. After reviewing these, I’ll give you some clues to what might be in store for the rest of the year!

Job gains since the Great Recession were wiped out.

FRED Chart Image

When the government forces businesses to close and Americans to stay indoors, people will lose their jobs. This happened in record numbers, as shown by the unemployment rate chart above. Consider this:

  • 21 straight weeks of weekly unemployment claims above one million
  • 22 million total jobs lost
  • Unemployment rose higher in three months during COVID-19 than it did in the two years of the Great Recession
  • Record-low unemployment in February (3.8%) to 14.4% unemployment in April

Though it might take years for some of these jobs to come back, we are already seeing additional job records being broken. An estimated 7.5 million jobs were added in May and June after the worst of the shutdowns ended.

The economy had its worst quarter EVER.  

GDP image

A good gauge for how the economy is doing is the Gross Domestic Product, or GDP.  Simply put, it’s a way to measure how much our country produced in a given quarter. In the second quarter, the economy shrank at an astounding rate of -32.9%.

Where does this rank compare to previous recessions?

  • COVID-19 Contraction (second quarter, 2020): -32.9%
  • Great Depression (1932): -13%
  • 1958 (first quarter): -10%
  • Great Recession (fourth quarter, 2008): -8.4%

As you can see, this is the worst quarter for our economy in our country’s history. Considering our economy is driven by business, this is no surprise. As our economy opens up, we will likely see a record growth in GDP in the third quarter. The Federal Reserve Bank of Atlanta is currently estimating an increase of over 25%.

Did oil prices actually go negative?

Oil PPB Chart Image

Perhaps one of the stranger events of 2020 was the price of oil. The price of May futures contracts for West Texas Intermediate Crude oil turned negative on April 20th. Without getting into the nuts and bolts of futures trading, this doesn’t mean that gas stations will pay you to fill up your tank. It did, however, show how bizarre this market was.

Why did this occur? For three reasons:

  • Oil production keeps increasing, especially since frackers have made America the top oil-producing country in the world
  • Demand is decreasing due to the slowdown in the economy
  • Storage issues in the US have made it impossible for certain buyers to keep buying

The Federal response has been swift and massive

Cares ACT Chart Image

When you think of the government, speed doesn’t come to mind. However, 2020 is no ordinary year. The government’s response has been unprecedented in terms of speed and depth. Think of this–President Trump had his address to the nation from the Oval Office on March 11 where he announced the ban on travel from Europe. This is widely considered the moment when we thought, “Wow, this is real” (the market dropped almost 10% the next day). Only 16 days later, the CARES Act was signed into law.

In total, over $2.4 trillion was spent to keep the economy afloat. While federal spending increased, revenues decreased, adding to the ballooning budget deficit.

Personal income saw a RECORD…increase?

Personal Savings Chart Image

Personal income includes income from wages, salaries, Social Security, government benefits, etc. How can personal income see a record increase as millions of Americans were losing their jobs?

The 10.5% surge in personal income can be attributed to the government’s response through the CARES Act. This includes the stimulus checks and increase in unemployment benefits.

As the Bureau of Economic Analysis points out, personal income can provide clues to future consumer spending.

Personal savings surged during the shutdown