The US economy continues to struggle, but as of the first week of June 2020, job losses are decelerating. Initial jobless claims are still nearly 2-million per month down from the highs in March near 6-million per month. The strain of job losses in conjunction with the murder of George Floyd has sparked both violent and peaceful protests around the United States.
George Floyd was a 46-year-old black man, was murdered in Minneapolis, Minnesota, by Derek Chauvin, a white police officer, who knelt on Floyd’s neck for almost nine minutes while Floyd was handcuffed face down in the street. The murder was captured on video which sparked an outburst of violent riots throughout the United States. While the violence has subsided, peaceful protests continue each day, in several different cities. While the riots will likely have little impact on economic growth, they will likely have a long-lasting impact on the social fabric. On June 4, 2020, a memorial service in Minneapolis was held for George Floyd, as mourners gathered there and around the country.
Three ex-officers have now been charged for the murder of George Floyd. Derek Chauvin, who was the senior officer is facing a murder 2 charge. The other three ex-officers were charged with aiding and abetting second-degree murder in the killing of Mr. Floyd.
The Federal Government is Clashing with the People
While demonstrations continue in cities around the country, the US Attorney General William focused much of the federal response on the District of Columbia. Clashes there have showcased the inherent tension between the federal government, which has constitutional authority over the District of Columbia. The elected local government, which has sharply criticized the heavy federal presence on local streets.
Photo Opportunity Strikes a Nerve
Attorney General William Barr said the forceful removal of peaceful protesters outside the White House before an appearance by President Trump walked through Lafayette Square for a photo opportunity during the first week of June was necessary to protect federal property. This action struck a nerve and incited a night of clashes in the city that led to the use of military helicopters and drew an array of federal agents and National Guard troops.
This action was met with a lawsuit. The American Civil Liberties Union and other civil rights groups sued Mr. Trump and Mr. Barr on behalf of Black Lives Matter DC over the incident at Lafayette Square, arguing federal officials violated their constitutional rights by firing chemical agents at them.
CEO’s are Speaking Out
There has been a swift change in the way CEOs from S&P 500 companies are evaluating the current situation. Historically, CEOs would stay silent on a political or social matter but in this situation, CEOs said they have decided that speaking publicly about issues is part of the job, which marked change from earlier eras when executives avoided statements that could be seen as political. The business roundtable, which was created by Donald Trump, said they would take action to help ease the social tensions created by the murder of George Floyd.
How Have the Protests Impacted the Stock Market
While the spread of COVID-19 sparked a market selloff and a subsequent rebound, the murder of George Floyd and the subsequent riots did not impact the Dow Jones Industrial Average. Stocks continued to trend higher as liquidity in the US flooded the markets. Looking forward, this issue will likely continue to impact the hiring at all large companies. Diversity will become the key issue for large companies as they look to add many black and brown faces to their ranks.