There are three pieces of economic data that could tell us how reopening the Michigan economy could play out. WGVU spoke with Paul Isely, Associate Dean in the Seidman College of Business at Grand Valley State University who tells us it begins with how consumers behaved in March.
"They spent a lot less money. So, consumer expenditures went down by more than 7% and their incomes went down a little bit, 2% but they saved a lot more. They're saving like it's the 1970's. We haven't saved like this since the 1970's. So, they actually were looking at this with a lot of fear was fear of the virus because those changes were happening before the economy was truly fully impacted.
So, we know that fears driving this. The second piece that we know is that some of that fear starting to alleviate a little bit and we know that because we can look at credit card data over the course of April and as we will march through April we can see for the stores that are still open that they're selling more stuff now than they did at the beginning of the month. So, people are now starting to get used to this new normal and they're starting to become a little less fearful of some of the worst issues and we're seeing them step out a little bit purchase some things.
And that can be seen in the unemployment claims data. So, the unemployment claims data that was released is really looking at the middle of the month before the executive order was allowing a little bit more loosening. So, this is even before we started to loosen it was during the tightest part of the executive order. And here in Michigan, for the middle of April, more people were hired then entered the unemployment system and so we actually saw a drop in continuing claims in Michigan in the middle of April. Now, we're still looking at 20% unemployment, it's still an awful situation but we look like we probably will have peaked in unemployment in the middle of April as long as the virus doesn't come back."
"Paul Isley, Associate Dean of the Seidman College of Business at Grand Valley State University thank you so much."
"Thank you for having me."