Gas Left in Tank

Who's gonna tell you when
It's too late?
Who's gonna tell you things
Aren't so great?
--The Cars

Surprise jobs report this am indicating that employment actually grew in May. Markets up big on the news.

Today's #jobs #s shocker spike. Growth in jobs ⬆️ 2.5mm jobs in May. Hospitality/leisure jobs ⬆️ 1.29m construction ⬆️ 464-k goods producing ⬆️ 669-k @POTUS news conference on jobs today @ 10am et @MorningsMaria @FoxBusiness join us now

— Maria Bartiromo (@MariaBartiromo) June 5, 2020

As we have discussed frequently on these pages, there are many reasons to doubt the accuracy of government statistics related to jobs. These numbers are easily manipulated.

However, I must admit that a faster-than-expected recovery from the Lockdown Depression would not completely surprise me.

Yes, the fraction of people suddenly out of work resembles Great Depression levels. And GDP has likely contracted by double digit percentages on an annualized basis over the past 2-3 months.

Unlike the Great Depression, though, the Lockdown Depression has not been driven by natural forces. Buyers and sellers did not voluntarily decide to dial back production and trade due to unmanageable leverage or collective risk aversion.

Instead, commerce was forced to the sidelines.

Even if there are structural issues likely to impair economic progress down the road, there may still be gas left in the tank to permit further travel before breakdown.

Therefore, it seems reasonable to consider the possibility that once lockdown force is removed from the system, production and trade fire back up and get back on the road for at least a while.

After all, if some gas remains, economic drivers will be prone to use it.