We just got a way better jobs report than expected for May. The U.S. added--added!--2.5 million jobs last month, versus the decline of 7.5 million that economists were expecting. The unemployment rate fell a point-and-a-half to 13.3%, compared with estimates calling for it to rise to 19% and some forecasts that ranged as high as 26%.
It's a completely unexpected outcome--except that it's not. The stock market has been telling us that the U.S. was rebounding more quickly from the pandemic than anyone expected. But instead of being cheered by the market rebound, people decried "the gap between Wall Street and Main Street," and focused instead on the gloomy forecasts about how much of this job loss researchers think will be permanent and how we're already in another Great Depression.
Thank God we have the stock market. At least it's one source of information that doesn't hail from the group-think halls of academia and think tanks. And yet, surprise, surprise, it's more often than not the target of the professional class's ire. Every campaign cycle, someone is pushing a financial transaction tax to supposedly protect the interests of everybody else against the 1% (and to pay for all the programs their experts will run). I'm starting to wonder if it's not meant to protect themselves against the inconvenient verdicts of the stock market.
After all, guess who has been buying this market since the darkest days of the pandemic? Retail investors. The general public. Here's Axios, on March 30: "As traders around the globe have frantically unloaded positions in recent weeks, so-called mom and pop retail investors have kept level heads and not sold out of stocks." See? "Wall Street" was panicking and selling the rally. Everyday Americans were buying.
And while "retail buying" is typically treated with contempt by the professionals, it turns out the Average Joe was on to something. Here's Forbes, a month ago: "Buyer Beware: Retail Investors Buying USO's Oil ETF." USO closed under $20 that day. Today, it's over $28. Or how about all the retail investors buying airline stocks in April? American has gone from the $9-12 range that month to over $21 today.
We still don't know what the future holds. (Obviously.) But we're showing much more resilience in the early stages of recovery and reopening than was expected, and it was the everyday Americans who believed that during the darkest days of the shutdown. And it was the stock market propelled by Main Street buyers, as opposed to the "experts," telling us that all along the way.
See you at 1 p.m!