Fed Saves The Day

Another example of this type of data is seen in the chart below. It shows the number of TSA checkpoint airport passengers in 2019 and 2020. Airline passenger traffic is down 90% from last year. Unlike in China, American data is still getting worse. If you wait for the traditional economic data to start getting better, you will miss the stock market bottom by a few weeks. 

If you wait for this updated data, you’ll be closer. You don’t necessarily need to capture the bottom perfectly. There will be plenty of gains for you to have if you wait for some confirmation that the economy is rebounding.

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Consumers Need Money Now

Consumers aren’t in great shape to deal with any kind of weakness in the labor market even though they are much less leveraged that they were prior to the last recession. As you can see from the chart below, 33% of consumers have less than $100 to deal with an emergency or job loss. 

The good news is unemployment insurance exists and is being bolstered by $600 per month for 4 months. Plus, there will checks of $1,200 give to everyone making under $75,000 (children get $500). Most people without an emergency savings account make less than $75,000. It’s scary that only 43.4% of Americans have over $1,000 in savings. You’re supposed to have 3-6 months of income saved up. 

Average weekly earnings of private employees is $981. If you multiply that by 13 to get about 3 months of savings, you wind up with needing $12,753. Not that many people came into this situation financially prepared!

(Click on image to enlarge)

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