The Market Week In Review - Friday, May 8

The U.S. stock market finished the week higher despite record-breaking unemployment numbers as some states begin the early phases of reopening their economies. Interest rates moved higher on the longer end of the curve as the 10-year treasury yield rose from 0.64% to 0.69%, but moved lower on the shorter end with the 2-year treasury falling from 0.20% to 0.16%. The price of gold was little changed on the week, rising only $2 to $1,709 an ounce. The price of crude oil continues to rise higher after dipping below $0 a barrel on April 20th as it finds support from production declines and improving demand.

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The Worst Jobs Report Ever?

The Bureau of Labor Statistics reported this morning that a record 20.5 million American jobs were lost in April, while the unemployment rate soared to 14.7%.  April’s job losses follow a steep decline in March as well when employers cut 870,000 jobs.  The job numbers are so gloomy that some commentators suggest that we are in the midst of the worst labor market crisis ever. I say, far from it. That “distinction” unquestionably belongs to The Great Depression.

The job losses brought on by efforts to curtail the spread of Covid-19 greatly surpass the 8.7 million jobs lost during the 2008-2009 recession, when the unemployment rate peaked at 10% in October of 2009. The only time the employment rate has been higher than now was during the height of the Great Depression, when it is estimated that the unemployment rate peaked at about 25%, in 1933.

However, there is one huge difference between the Great Depression, the Great Recession, and the current unemployment crisis. In the first two instances, the job losses were triggered by a deep-rooted economic crisis, whereas in the present case the trigger is medical, and the job losses were brought on by a temporary policy decision.

Before the Coronavirus necessitated strict social distancing rules, the U.S. economy was firing on all cylinders, and employment was at an all-time low. Compare that with the Great Depression, when

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