OMAHA - The May U.S. jobs report indicated the nation's economy added 2.5 million jobs, the highest monthly addition on record. This news emboldened the optimists who envisioned a V-shaped recovery, and dampened the pessimists who foresaw a W-shaped economic rebound. Other recent economic indicators support an economic recovery somewhere between the extremes, a Nike Swoosh, which would be a sharp downturn followed by a slow recovery.

Record federal deficit spending via the CARES Act, and the Federal Reserve's support for ultra-low short and long-term interest rates, are punishing savers and rewarding spenders. U.S. equity markets are pricing in an economic revival with expanding business profits indicative of a "V."

Contrary to most recessions, this one was led by the consumer and there is little evidence from consumer spending data of a return to pre-Covid spending levels. State and local regulations have limited most businesses in this industry to approximately 50% of their pre-Covid-19 capacity. This may indicate a Nike swoosh shaped recovery.

Rising U.S. Covid-19 infection and death rates would put a dagger in the heart of any economic rebound. Growth based on federal government deficit spending and Federal Reserve's ultra-low interest rates is not sustainable. The U.S. and global consumers must return to work and spending. State economic lockdowns will guarantee a return to a recession as the economy reaches the top of the V

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