The former Goldman Sachs chief economist, Jim O’Neil (pictured), argues a V-shaped economic recovery is “perfectly possible”, adding that the US and a number of European economies are in resilient shape.
O’Neil said early indicators make it “pretty clear” that many economies are in a comfortably better position than some had feared, speaking to CNBC’s “Street Signs” on Friday. Back in January, there was “mass consensus belief” a “V-shaped” stock market performance is to be expected.
A V-shaped recovery refers to a sharp decline in economic activity which is then matched by an abrupt rebound.
The comments from O’Neil, chairman of the London-based think tank Chatham House, came just a few hours before US jobs data revealed an earlier-than-expected rebound in the labor market as a whole, with hiring up across a range of industries.
US unemployment dropped unexpectedly in May to 13.3%. Reopened businesses recalling millions of workers faster than economists had predicted has somewhat offset the impact the coronavirus pandemic has had on the sector.
According to the US Bureau of Labor Statistics, total nonfarm payroll employment rose by 2.5 million in May, and the unemployment rate declined 1.4% points to 13.3% , making a V-shaped economic recovery “perfectly possible.”. Employment in May rose sharply in a few key sectors as economic activity resumed to a limited degree. However, while some sectors saw job gains from April to May, IT jobs steadily declined from March through April and May.
As employers added 2.5 million workers to their payrolls, there is evidence that the collapse may have bottomed out in April at 14.7% and that a recovery is well underway as states loosen their lockdowns.
Hiring in the construction industry increased by 464,000 jobs last month, recouping about half of April’s decline. There were also gains in employment in education and health services, retail trade, manufacturing, professional and business services, financial activities and wholesale trade.
The S&P 500 jumped another 2.6% after a report said the US job market surprisingly strengthened last month and the yield on the 10-year Treasury rose to 0.88% from 0.82% late Thursday. This area of the market has been showing much more caution than stocks recently.
O’Neil also pointed to the efforts of a range of drug firms from the UK’s AstraZeneca to Gilead in the US to find a vaccine for the disease, which would aid a faster economic recovery.
“It adds to my belief that it is not impossible that a usable vaccine could be available for a significant part of the world by this September. Obviously, they have got to get through some important tests in the coming weeks, but it sounds to me that it is quite possible and it is a fantastic development,” O’Neill said.
You can learn more about bonds and diversify your portfolio by opening a brokerage account with one of the brokers we’ve reviewed.
Trusted & Regulated Stock & CFD Brokers
What we like
- 0% Fees on Stocks
- 5000+ Stocks, ETFs and other Markets
- Accepts Paypal Deposits
Min Deposit
$200
Charge per Trade
Zero Commission on real stocks
64 traders signed up today
Visit Now67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
Available Assets
- Total Number of Stocks & Shares5000+
- US Stocks
- German Stocks
- UK Stocks
- European
- ETF Stocks
- IPO
- Funds
- Bonds
- Options
- Futures
- CFDs
- Crypto
Charge per Trade
- FTSE 100 Zero Commission
- NASDAQ Zero Commission
- DAX Zero Commission
- Facebook Zero Commission
- Alphabet Zero Commission
- Tesla Zero Commission
- Apple Zero Commission
- Microsoft Zero Commission
Deposit Method
- Wire Transfer
- Credit Cards
- Bank Account
- Paypall
- Skrill
- Neteller
What we like
- Sign up today and get $5 free
- Fractals Available
- Paypal Available
Min Deposit
$0
Charge per Trade
$1 to $9 PCM
Visit Now
Investing in financial markets carries risk, you have the potential to lose your total investment.
Available Assets
- Total Number of Shares999
- US Stocks
- German Stocks
- UK Stocks
- European Stocks
- EFTs
- IPOs
- Funds
- Bonds
- Options
- Futures
- CFDs
- Crypto
Charge per Trade
- FTSE 100 $1 - $9 per month
- NASDAQ $1 - $9 per month
- DAX $1 - $9 per month
- Facebook $1 - $9 per month
- Alphabet $1 - $9 per month
- Telsa $1 - $9 per month
- Apple $1 - $9 per month
- Microsoft $1 - $9 per month
Deposit Method
- Wire Transfer
- Credit Cards
- Bank Account
Share
Galina Mikova
