June 2020 Economy At A Glance

By: Taro Chellaram /Wells Fargo Economics & Financial Report/Jun 18, 2020

June 2020 Economy At A Glance

The Federal Reserve doesn't expect a quick rebound.

The Fed expects to hold interest rates near zero through the end of this year, perhaps well into next year, and maybe even into ’22. 

The World Bank is less optimistic than the Fed.

The bank expects the global economy to shrink 5.2 percent this year, making it one of the most severe downturns in the past 150 years. Never before have so many countries entered a recession at the same time. 

Many economists expect the recovery to begin in Q3.

In a recent survey of 60 prominent academic and business economists, The Wall Street Journal found 68.4 percent expect the recovery to begin Q3/20. Just over a fifth, 22.8%, said it had already begun in Q2/20. 

The spot price for West Texas Intermediate, the U.S. benchmark for light, sweet crude, averaged $37.32 per barrel the first week of June, up from $15.71 the first week of May. 

Baker Hughes reports that the North American rig count fell to 279 the week ending June 5, the lowest level on record. During the Fracking Bust of ’14 – ’17, the rig count bottomed out at 404. 

HOUSTON EMPLOYMENT UPDATE

The nine-county Metro Houston area has lost 330,100 jobs since the economy shut down due to the COVID-19 pandemic, according to Partnership calculations based on Texas Workforce Commission (TWC) data. 

Today's Losses in Perspective

The region lost 221,000 jobs during the ’80s energy bust, or one in every seven jobs. Houston’s economy is significantly larger now, so the 330,100 jobs lost in the COVID-19 recession represents a smaller share of employment, about one in ten jobs in the region. 

UNEMPLOYMENT

The region’s unemployment rate, as low as 3.9 percent in February, rose to 14.2 percent in April. The rates are not seasonally adjusted. Again, TWC has likely understated local unemployment. 

POPULATION TRENDS

Houston reached a milestone last year. The nine-county metro area topped 7.0 million residents, according to data released this spring by the U.S. Census Bureau. The announcement went largely unnoticed because the nation’s attention was focused on the COVID-19 pandemic.




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