- Lawrence Yun, chief economist with the National Association of REALTORS ® (NAR), believes COVID pandemic economy different from Great Depression economy
- Yun believes economic indicators of the two do not compare
Lawrence Yun, the chief economist with the National Association of REALTORS® (NAR), believes comparisons between the economy of the Great Depression and the current pandemic economy are not warranted. Pointing to the unemployment rate, the pace of job losses, government spending and monetary policy, comparisons do not make sense, according to Yun.
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- Unemployment rates – Yun said the unemployment rate during the Great Depression was 25%. Today’s unemployment rate currently stands at 14.8% though “it may rise to 20% before going down.”
- Rate of joblessness – During the Great Recession, job losses occurred over five years. Current job losses occurred seemingly overnight…+36.8M people have filed for unemployment benefits in eight weeks.
- Government spending – Yun said when speaking at NAR’s first virtual midyear conference called the Residential Economic Issues and Trends Forum at the Virtual Realtors Legislative Meetings that in the 1930’s, Congress increased spending and taxes. Today’s Congress is cutting taxes while doling out the largest stimulus package “ever.”
- Monetary policy – In the ‘30’s, monetary policy contracted while today’s Federal Reserve has okayed maximum loosening to stimulate lending and liquidity.
Yun certainly acknowledged the known in terms of how long the COVID-19 pandemic would last, whether or not there will be a second surge of the coronavirus, whether or not unemployment rates will continue to grow and whether or not (and how long) specific industries will “come back.”
But in terms of whether or not the economies of the 1930’s and that of 2020 are comparable, Yun says no. In terms of the impacts of these two economies however, the comparisons are obvious:
- Historic unemployment numbers
- Fear and anxiety due to job/income losses and COVID losses
- Uncertainty and instability
Bottom line: government policies that shaped the economies of the 1930’s and 2020’s are different while the impacts of these two economies were, have been and will continue to be life changing.
Thanks to InmanNews.
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