While expressing optimism about the U.S. economic recovery, business economists acknowledge ongoing concerns with the course of the pandemic, the October survey conducted by the National Association of Business Economists reports.
“The NABE Outlook panel sees a strong rebound in economic activity after the collapse experienced during the second quarter,” said NABE Vice President Manuel Balmaseda, CBE, chief economist, CEMEX. “The median forecast calls for a 25% annualized growth rate in the third quarter of 2020 for inflation-adjusted gross domestic product, or real GDP. That would reverse much of the 31% annualized decline from the second quarter. However, the panel has become less bullish about the fourth quarter of 2020, as well as 2021. The median real GDP growth estimate for 2021 is 3.6%, compared to a 4.8% forecast in the June survey.”
“NABE panelists have become more optimistic, on balance, but remain concerned about a potential second wave of COVID-19,” added Outlook Survey Chair Eugenio Aleman, economist, Wells Fargo Bank. “Thirty-eight percent of panelists believe that the economy will have returned to pre-pandemic GDP levels by the second half of 2021, 32% expect it to reach that level in the first half of 2022, and 30% believe it will occur in the second half of 2022 or later.
On the danger that the economy might suffer a double-dip recession, in which GDP would shrink again, 51% of the forecasters estimate the chances at 20% or less. Only 12% see the likelihood at 50% or more.
More than half the panelists believe that 10% to 20% of the jobs that have been lost to the pandemic recession are permanently gone, with many hotels, restaurants, retailers and entertainment venues unable to re-open.
A little optimism these days goes a. long way.