U.S. Rebounding from COVID Downturn More Quickly than Expected
New York, NY, September 11, 2020-The U.S. economy and labor market are recovering from the coronavirus-related downturn more quickly than previously expected, economists said in a monthly survey, reported by the Wall Street Journal.
“Business and academic economists polled by The Wall Street Journal expect gross domestic product to increase at an annualized rate of 23.9% in the third quarter. That is up sharply from an expectation of an 18.3% growth rate in the previous survey.
“‘I have been encouraged that many of the economic indicators have come in above consensus, perhaps suggesting that the U.S. economy is bouncing back stronger than expected,’ said Chad Moutray, chief economist for the National Association of Manufacturers. ‘With that said, there continue to be lingering challenges, especially in the labor market and with uncertainties surrounding Covid-19 outbreaks.’
“A rebound in growth in the third and fourth quarters isn’t expected to make up for ground lost earlier in the year. GDP shrank at a 31.7% annual rate in the second quarter and declined at a 5% pace in the first.
“The projected rebound for the third quarter would recoup about half of the output lost in the first half of the year. To return to the previous peak recorded in the final quarter of last year, the economy would need to grow at a roughly 24% rate again in the fourth quarter of this year. Economists see that as unlikely: Their forecast for fourth-quarter growth is for a 4.9% annual rate, suggesting the recovery will be protracted.
“The average forecast called for GDP to shrink 4.2% this year, measured from the fourth quarter of 2019, an improvement from the 5.3% contraction predicted in last month’s survey.
“Nonetheless, the U.S. economy would still be on track to contract in 2020 by the most since contemporary records began in 1948, as measured from the fourth quarter of the prior year. By comparison, in the fourth quarter of 2008-during the financial crisis-GDP contracted just 2.8% from the prior year.”