The current health crisis has caused everyone to question when the economy will recover. While COVID-19 has reached a plateau, many are concerned about when businesses will start opening up. There are three types of sciences used to forecast the economic recovery.
- Business Science – Looks at how the economy rebounded in the past.
- Health Science – Looks at when COVID-19 will be under control and whether there will be a second wave.
- People Science – Looks at how long it will take American consumers to return to normal activities such as flying, attending sporting events, going to the movies, and shopping.
Sam Khater, Chief Economist at Freddie Mac, says:
“Although the uncertainty of the crisis means forecasts of economic activity are more unclear than usual, we expect that most of the economic damage from the virus will be contained to the first half of the year. Going forward, we should see a recovery starting in the second half of 2020.”
The Bureau of Economic Analysis released an estimate for the Gross Domestic Product (GDP) for Quarter 1 of 2020. The GDP estimate is -4.8%. This number indicates exactly how much the US economy slowed as a result of the COVID-19 shut downs.
Quarter 2 will reveal an even greater slowdown. Businesses are definitely feeling the effect of the global pandemic. Despite this, the major financial institutions predict that businesses will rebound and the economy will start to recover during the second half of 2020.
As the nation’s economy comes back to life and businesses embrace new waves of innovation to serve their customers, the American spirit of grit, growth, and prosperity will be alive and well.
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