The economy is moving in the right direction, as many economic data points are coming in substantially better than what the economists expected. From May job gains coming in more than 10 million higher than expected and retail sales soaring a record 18%, how quickly the economy is bouncing back has surprised nearly everyone.
â€œAs good as the recent economic data has been, we want to make it clear, it could still take years for the economy to fully come back,â€ explained LPL Financial Senior Market Strategist Ryan Detrick. â€œThink of it like building a house. You get all the big stuff done early, then some of the small things take so much longer to finish; Iâ€™m looking at you crown molding.â€
Hereâ€™s the hard truth; it might take years for all of the jobs that were lost to fully recover. In fact, during the 10 recessions since 1950, it took an average of 30 months for lost jobs to finally come back. As the LPL Chart of the Day shows, recoveries have taken much longer lately. In fact, it took four years for the jobs lost during the tech bubble recession of the early 2000s to come back and more than six years for all the jobs lost to come back after the Great Recession. Given many more jobs were lost during this recession, it could takes many years before all of them indeed come back.
The economy is going the right direction, and if there is no major second wave outbreak it could surprise to the upside. Importantly, this economic recovery will still be a long and bumpy road.
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