We’ve always said that the health crisis would determine the path of the economy, and the latest news on the pandemic is concerning. Cases of the virus, hospitalization and mortality rates have surged to unfathomable levels, and health experts believe this distressing trend will accelerate after the holidays.
Like his former boss, President Barack Obama, Joe Biden will be inheriting a damaged economy when he takes office on January 20, 2021. The Covid-19 pandemic has not only sent the nation into its deepest recession since the 1930s, it is leaving indelible scars that will restrain activity for some time to come.
To say that uncertainty is rising would be an understatement. Political and policy uncertainties are surging with questions surrounding the next round of fiscal aid, questions around the outcome of the elections, questions around a peaceful transfer of power
Despite being portrayed as dismal scientists, we economists are not always pessimistic about economic prospects. In fact, we are happy to report that things are looking up in many respects.
The rebound in jobs, production and consumer spending in recent months strongly indicates that the recovery from the harsh Covid-19 recession is underway.
Just as government-mandated lockdowns sent the economy into a tailspin in March and April, the lifting of restrictions and the reopening of businesses propelled activity higher in May and June.
The healing process has begun. With important economic data for May now in the books, it looks like the economy hit bottom in April.
The coronavirus recession has hit the U.S. with tremendous force. Following the sizeable 4.8 percent contraction in GDP during the first quarter – putting an end to the longest expansion on record—activity is poised to plunge by a depression-like 30-40 percent annual rate in the second quarter.
It won’t be confirmed for at least several months, but the U.S. is almost certainly hurtling into a recession. A little over a month ago, when the Covid-19 coronavirus first hit the headlines we, along with most economists, thought the nation could weather the storm if proper policies were quickly implemented
During this record-long expansion, now in its eleventh year, the economy has struggled through seven episodes in which its growth engine has downshifted sharply – to about 1 percent or less for a given quarter.
The economy ended 2019 with a bit more momentum than expected, as consumers ramped up spending and home construction soared to a 13- year high in December.
As the curtain rings down on 2019, the year will be remembered for a number of hits and misses. Perhaps the biggest hit is that the economy completed a marathon, having outlasted all previous expansions by at least six months and still going.
