The second half of 2020 is upon us and it is now abundantly clear that the COVID disruption is not going away and, in fact, may be just the tip of the iceberg in terms of the problems facing the economy today. In total, nearly 33 million Americans were getting jobless benefits as of June 20th, about five times the peak during the Great Recession. Things have improved since new claims peaked in late March, but spiking coronavirus infections around the country and expiring federal aid means layoffs could increase in the coming months.
It is clear that there is a disconnect between Wall Street and the main street economy. Many unemployed individuals may soon see a large drop in household income as the $600-a-week federal supplement to unemployment benefits enacted early in the recession is scheduled to expire after July 31, barring an extension from Congress, which seems unlikely given opposition. Meanwhile we have seen the stock market reach near pre-recession/COVID levels. I simply don’t see how we can avoid more economic hardship until the country is fully open for business and unemployment is back to more historical levels. We have to believe that some of nearly 33 million unemployed Americans are storage tenants.