How we bounce back: recovery and data

    
We’re facing unprecedented challenges, but there’s reason to believe we’ll recover and emerge stronger. To gain perspective, let’s look at how we’ve bounced back financially from previous crises.

COVID-19 is unique

In the past, it’s taken years for the stock market to bottom, and job loss has been gradual.
With COVID-19, the effects were immediate and severe, as you can see in these charts depicting
the first few months of the crisis.

Dow Jones Industrial Average
Stocks fell 34% in just a month and a half.1

Initial Jobless Claims
Millions filed for unemployment each week, the most in recorded history.2

Action: Pay attention to the data affecting your industry and geographic region, and use national numbers to create overall context.

Policy makes a big impact

Historically, the government has been quick to respond to crisis. Consider these extensive responses to previous economic challenges.

Federal Deposit
Insurance Corporation

1933

Protects consumer
deposits in
member banks

Securities and Exchange Commission

1934

Regulates trading

Social Security Administration

1935

Provides supplemental income for the elderly

GI Bill

1944

Makes education possible for millions of veterans

Action: Stay on top of new regulations, policies and aid packages. They can provide opportunities for growth and affect how your business operates.

Perspective is powerful

How long did it take to recover from the last recession? It depends on your perspective.

Gross Domestic Product
According to the GDP, the downturn
lasted 1.5 years, but…3

Dow Jones Industrial Average
Stocks took about 6 years to recover…

Consumer Sentiment
…it took a full 8 years for consumers to feel confident about the economy again.4

Jobs
…and roughly the same amount of time for employment to rebound.5

Action: Prioritize day-to-day observations and customer feedback ahead of big-picture data.

Recessions can provide opportunity

Downturns change our habits drastically, but some industries survive and potentially even grow during recessions. Deloitte looked at the outlook for a variety of industries.6

Action: Consider which industries and products are doing well, and use those insights to brainstorm how you might pivot, and potentially grow, your business.

Learn more about the difference strong leadership can make during COVID-19.

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  1. S&P Dow Jones Indices
  2. U.S. Department of Labor Data, as compiled by the Federal Reserve Bank of St. Louis
  3. U.S. Bureau of Economic Analysis, as compiled by the Federal Reserve Bank of St. Louis
  4. University of Michigan survey data, as compiled by the Federal Reserve Bank of St. Louis
  5. Nonfarm Payrolls, Bureau of Labor Statistics data, as compiled by the Federal Reserve of St. Louis
  6. COVID-19 sector heatmaps, Deloitte, May 2020