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    Unemployment Report: No Need to Be Terrified

    Unemployment Report: No Need to Be Terrified | MyKCM

    Last Friday, the Bureau of Labor Statistics (BLS) released its latest jobs report. It revealed that the economic shutdown made necessary by COVID-19 caused the unemployment rate to jump to 14.7%. Many anticipate that next month the percentage could be even higher. These numbers represent the extreme hardship so many families are experiencing right now. That pain should not be understated. However, the long-term toll the pandemic will cause should not be overstated either. There have been numerous headlines claiming the current disruption in the economy is akin to the Great Depression, and many of those articles are calling for total Armageddon. Some experts are stepping up to refute those claims. In a Wall Street Journal (WSJ) article this past weekend, Josh Zumbrun, a national economics correspondent for the Journal explained:

    “News stories often describe the coronavirus-induced global economic downturn as the worst since the Great Depression…the comparison does more to terrify than clarify.”

    Zumbrun goes on to explain:

    “From 1929 to 1933, the economy shrank for 43 consecutive months, according to contemporaneous estimates. Unemployment climbed to nearly 25% before slowly beginning its descent, but it remained above 10% for an entire decade…This time, many economists believe a rebound could begin this year or early next year.”

    Here is a graph comparing current unemployment numbers (actual and projected) to those during the Great Depression:Unemployment Report: No Need to Be Terrified | MyKCMClearly, the two unemployment situations do not compare.

    What makes this time so different?

    This was not a structural collapse of the economy, but instead a planned shutdown to help mitigate the virus. Once the virus is contained, the economy will immediately begin to recover. This is nothing like what happened in the 1930s. In the same WSJ article mentioned above, former Federal Reserve Chairman Ben Bernanke, who has done extensive research on the depression in the 1930s, explained:

    “The breakdown of the financial system was a major reason for both the Great Depression and the 2007-09 recession.” He went on to say that today – “the banks are stronger and much better capitalized.”

    What about the families and small businesses that are suffering right now?

    The nation’s collective heart goes out to all. The BLS report, however, showed that ninety percent of the job losses are temporary. In addition, many are getting help surviving this pause in their employment status. During the Great Depression, there were no government-sponsored unemployment insurance or large government subsidies as there are this time. Today, many families are receiving unemployment benefits and an additional $600 a week. The stimulus package is helping many companies weather the storm. Is there still pain? Of course. The assistance, however, is providing much relief until most can go back to work.

    Bottom Line

    We should look at the current situation for what it is – a predetermined pause placed on the economy. The country will recover once the pandemic ends. Comparisons to any other downturn make little sense. Bernanke put it best:

    “I don’t find comparing the current downturn with the Great Depression to be very helpful. The expected duration is much less, and the causes are very different.”

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    Jeff Duneske

    With over 20 years of real estate experience, a career volume of over $250 million, over 1,000 properties sold, Jeff Duneske, broker/ owner of Duneske Real Estate Advisors at Keller Williams Advantage, has a lot to be proud of. However, his greatest source of pride is his honor: Jeff has built his business — and thrived in the industry — by instilling his clients’ trust.“ I have always said that we meet our clients at the crossroads of life and change — that we can make a difference, earn their trust and help our clients during this change.” “Knowing that I have earned the trust of over 1,000 clients and the privilege of guiding them through one of life’s largest financial transactions to achieve the American Dream is by far the greatest reward of my business.” Jeff was born and raised in Novi and earned the distinguished rank of Eagle Scout when he was 15 years old. In 1996, Jeff graduated from Novi High School and The Oakland Fire Academy and was intent on becoming a full-time firefighter. After serving as an auxiliary firefighter and EMT in Novi and Walled Lake for several years and not landing a full-time position on the force, Jeff decided to shift gears and find another professional path where he could help people and began his real estate career in 2000. Having been the #1 agent or team at various brokerages over his career, as well as the #1 team at Keller Williams Advantage and the #4 team in the Michigan-Ohio region of Keller Williams International in 2019, Jeff has certainly demonstrated his drive to reach for the sky and his commitment to his clients. “We never rest on our laurels, and we’re always improving our current systems — and implementing new systems — to boost efficiency and assure stellar service.” Jeff, who has served on the Professional Standards Committee for the past nine years, embraces a strong mindset to persistently achieve his goals without compromising his morals, standards, or ethics for anyone or any transaction. “You must uphold your standards because if you don’t uphold them, you have no standards at all.” “I run my life and my business by The Golden Rule: Treat others the way you would like to be treated.” Jeff’s noble purpose — conducting his business with the highest morals, ethics, and standards — has led him to a successful real estate career. More importantly, his ethical and moral standards have enriched his life and the lives of others in immeasurable ways … and because Jeff does not waver, he will continue to lead with purpose, honor, and great promise.

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