We are seeing sky-high unemployment numbers, yet at the same time, Wall Street has risen sharply since the coronavirus shutdown.
Have we really gone through a recession?
A recession, by the strictest definition of the word, is two straight quarters of negative national economic output, measured by something called GDP, or gross domestic product. By that measure, people who follow the economy for a living, say we are in a recession.
Economics lecturer Brian Marks with the University of New Haven explained.
“It was a public health crisis that with stay at home orders, triggered a cascading effect.”
Marks added this is not your typical recession, one that comes on slowly, and isn’t always deep. That’s due in part to it being tied to the coronavirus and the rapid shutdown of most of the economy.
“The speed of this recession, and the depth, was quite significant,” said Marks.
It’s a recession that has brought unemployment to Connecticut and the U.S. in the 10% range and roughly triple what it was before the pandemic struck. But it’s not hard times everywhere.
“There’s a big disconnect between what people are hearing about on Wall Street and what they’re feeling on Main Street,” Denis Horrigan with CT Wealth Management said.
Horrigan said he believes moves by Washington to lower interest rates, put stimulus checks in people’s pockets, and a growing number of retail investors attracted by no fee brokerages have boosted the stock market more than the overall economy.
“Some of the stimulative efforts that have happened have really done an awful lot to help Wall Street. We haven’t seen the effect and impact on Main Street as much as we would have hoped," Horrigan said.
Both Marks and Horrigan expect the recession will likely end very soon, possibly this fall. They add the recovery could take six months, or even a few years.