(Friday, August 7, 2020; 9:00 p.m. EST) Confirming a recovery is under way and the recession is ending, the U.S. Labor Department reports 1.76 million net new jobs were created in July and the rate of unemployment dropped to 10.2%.
In addition, strong increases in the service and manufacturing sectors were reported by corporate purchasing managers, according to the Institute of Supply Management, and ISM's forward-looking sub-index measuring new-order activity surged in July.
Improvement in the job situation and corporate purchasing numbers had been expected but the gains were materially stronger than had been expected by economists.
08/07/2020 closing number: 3,351.28
The Covid-crisis recession and recovery are unprecedented in modern U.S. history, making precise predictions tenuous. But the job situation and corporate purchasing manager data have been better than expected for two months.
The Standard & Poor's 500 stock index closed Friday at 3,351.28, up six-tenths of 1% for the day, +2.42% from a week ago, and +39.86% than its March 23rd bear market low.
Stock prices have swung wildly since the crisis started in March. Drops of as much as7% in one day have occurred in this period and volatility is to be expected in the months ahead.
For tax purposes, this is good time to consider certain strategies, including conversion to a Roth IRA from a traditional IRA, or gifting assets to children and grandchildren.
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