"US Unemployment Rate to Fall Below 10% Within the Year"

Bullerde Saint Louis Yeon-eun Governor Expected
Dimon JP Morgan Chase CEO "Rapid Recovery from Q3"
New York Also Preparing for Full Restart... Stock Exchange Trading Floor Opens

New York Governor Andrew Cuomo visited the New York Stock Exchange trading floor on the 26th, two months after its reopening, to ring the opening bell signaling the start of the stock market.
[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Baek Jong-min] Expectations are forming that the U.S. economy will recover quickly from the damage caused by the novel coronavirus infection (COVID-19). This is due to various states entering full-scale economic reopening during the Memorial Day holiday, along with positive economic indicators.

Jamie Dimon, CEO of JPMorgan Chase and a leading figure in the U.S. financial sector, said on the 26th (local time), "The U.S. economy will begin to recover rapidly starting in the third quarter," and assessed that "American consumers are healthier than during the previous crisis." He also introduced JPMorgan's forecast that the unemployment rate will drop to 10% by the end of the year. Previously, in the annual shareholder letter released on the 7th of last month, he pessimistically predicted that the U.S. unemployment rate would reach 14% by year-end and that the future situation was uncertain, but it appears he has changed his stance amid the resumption of economic activities.

James Bullard, President of the Federal Reserve Bank of St. Louis, also joined the early economic recovery camp. Among the Federal Open Market Committee (FOMC) members of the Federal Reserve (Fed), he has advocated relatively rapid early recovery. In an interview with Fox Business on the same day, he expressed hope that "the unemployment rate could fall below 10% by the fourth quarter." Bringing the unemployment rate down to single digits within the year is a pressing task for the Donald Trump administration ahead of the presidential election. Earlier, Kevin Hassett, Senior Economic Advisor to the White House, mentioned that "the U.S. unemployment rate could remain in double digits even in November when the election is held," fueling concerns about delayed economic recovery.

President Bullard even predicted, "The third quarter is very likely to be the best quarter ever from a growth perspective." This could be a base effect following the U.S. economy's plunge to its worst in the second quarter, but the faster-than-expected recovery is the best-case scenario for the U.S. administration hoping for a V-shaped rebound.

U.S. President Donald Trump also continued his optimistic view on early economic recovery through Twitter on the same day, stating that the "transition to greatness" is happening faster than expected. President Trump expressed satisfaction with the sharp rise in the New York stock market. On that day, the Dow Jones Industrial Average surpassed the 25,000 mark intraday, and the S&P 500 index broke through 3,000, marking the highest levels since March, showing strong performance.

The economic indicators released that day also collectively raised expectations for early economic recovery. The Conference Board's Consumer Confidence Index for May rose from 85.7 in the previous month to 86.6. This is considered an important point that boosts expectations for a rebound in consumption, which accounts for two-thirds of the U.S. economy. The Dallas Fed's May Business Activity Index also rebounded from -74.0 in the previous month to -49.2. This indicates a clear recovery trend in consumption and production.

The U.S. Department of Commerce surprised market participants by announcing that new home sales in April increased by 0.6% compared to the previous month. This result is completely different from experts' forecast of a sharp 21.9% decline.

New York State, the center of the U.S. economy and the most delayed in economic reopening, except for New York City, entered Phase 1 normalization, further raising expectations for early normalization. On the same day, the New York Stock Exchange reopened its trading floor after two months, and Governor Andrew Cuomo personally visited to hold an "Opening Bell" ceremony to mark the reopening. New York City Mayor Bill de Blasio set the reopening of Phase 1 economic activities in New York City for early June.