MATCO'S QUARTERLY MACRO OVERVIEW – Q3 2020
It is hard to imagine that we are now three quarters of the way through 2020. In one breath, it feels like just yesterday that society and the global economy were being forced into lockdown. At the same time, it seems as though a decade’s worth of developments have come to pass this year. Perhaps if society can work through 2020, we can weather any storm thrown our way. Continuing this theme of resilience, the economy has proven to be just that. The labor market, industrial production, consumption, and retail activity all came under significant pressure as the COVID-19 pandemic rattled the economy. However, substantial economic stimulus from global central banks and governments provided the necessary stability through the heart of the storm and has allowed the economic clouds to begin to part. Notably, North American retail sales have rebounded more than 25% since April of this year, housing sales in both the U.S. and Canada have staged a remarkable recovery thanks to ultra-low interest rates and the labor market has begun to mend its job layoff and furlough wounds. Without a doubt, consumer behavior has been impacted, causing economic growth to shift, allowing some sectors to benefit more than others. Nonetheless, the third quarter has shown that consumers continue to spend, and that remains a critical take-away at this stage of the recovery.