In January of this year we posted an article titled “Why Predictions Don't Work.” It is a message we deliver every year. Now that we have traveled almost one-half the way through the year, we thought we would like to bring this message back, because this year it applies more than ever. Here is a bit more verbiage from that commentary:
...As there is every year, there is an event that reminds us that predicting the future is impossible. We point out every year that the best of predictions can go awry quickly in the face of unforeseen events. And even when there are no events, we can't predict market turns. Right now, we still have low interest rates and an economy that continues to grow. At the end of January, we will get the first reading of economic growth for the last quarter of 2019. That should give us a clearer picture which will help our assessment of how strong the economy really is -- again, unless something else happens.
Obviously, something else happened. No one predicted just five months ago that we would be losing over 20 million jobs in just one month. And few predicted a gain of 2.5 million jobs the month after. This year's unforeseen event has been absolutely a game changer and months into the crisis, we can't predict how long the economy will falter and what the recovery will look like. If we knew when an effective vaccine or an effective drug was coming, that would help. For now, we look at the unemployment rate of 13.3% and hope that this is the start of the recovery as the country starts to open up. We further hope that this opening does not exasperate the crisis as we get closer to a medical solution.