The first quarter gross domestic product will inevitably contract between 20 and 40 percent. What about the second quarter? The next three months might seem like a lifetime away, but life comes at you pretty fast.
According to a new survey of economists by Bloomberg, America’s GDP and unemployment rate are once again expected to be depressing in the second quarter.
The monthly study found that the GDP will crater to an annualized pace of 25 percent from April to June. The jobless rate will surge to 12.6 percent, the highest since the 1940s.
One word: Recession.
Even with the Federal Reserve pumping trillions into the economy and Washington adding trillions more, it is only enough to drive up equity prices and nothing else.
Many of the experts are eyeing a possible reopening in May, but it will not be enough to stimulate the economy, writes James Knightley, chief international economist at ING Financial Markets.
“Even if the economy starts to re-open in mid-May, more than 20 million Americans will have lost their job with the economy likely having contracted around 13% peak-to-trough, more than three times deeper than the global financial crisis.
It will be a gradual re-opening of the economy, so a return to ‘business as usual’ is many months away. Throw in crippling financial losses and a legacy of defaults and it means we estimate U.S. economic output won’t return.”
Ah, the good old days of January 2020!
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