Home Financial The Economy Is Recovering More Quickly Than Expected

The Economy Is Recovering More Quickly Than Expected

Helen Mann
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Let’s end the week on some good news. The US economy and labor market are recovering from the coronavirus and ensuing lockdowns more quickly than expected, according to a Wall Street Journal poll of economists. Respondents expect third quarter economic output to jump at a 23.9% annualized rate.

This is better than analysts forecasted even one month ago. Last month, respondents in that same poll expected GDP to grow by 18.3% in the third quarter. This month’s results show a big jump.

The pickup is expected to make up for about half of what was lost in the first six months of the year, but the economy likely won’t return to it’s pre-corona state this year. In order for that to happen, GDP would have to grow by 24% in the fourth quarter, according to the WSJ survey. Instead, economists polled expect output to reach 4.9% in the October-December period.

GDP tumbled at a 31.7% annualized rate in the second quarter, after falling by 5.0% in the first.

On average, survey respondents predict that full year GDP will contract by 4.2% this year. That’s pretty bad, but it’s an improvement over their earlier estimate of 5.3%. The United States economy is on track to see its sharpest nadir since record keeping began in 1948.

To recap, the economy was humming along at the beginning of the year, with moderate GDP growth and record low unemployment. Then, the coronavirus pulled the rug out from under it. The National Bureau of Economic Research declared that the recovery ended in February. Economic output really hit the fan in April, when economic indicators across the board pretty much all tanked. Since then, most have been turning around, albeit slowly. A few sectors (e-commerce, home sales, autos) are taking off, but many others have a long way to go.

In case you had forgotten, the Congressional Budget Office, World Bank, OECD, and IMF have all issued ominous warnings about the state of the global economy this year. Soon enough, we’ll get to find out who’s forecast was the most accurate.

Tags Economy reboundingGDP growth
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Helen Mann

Helen is a freelance writer based in Austin, Texas. She has been writing for the logistics industry since 2016. Helen earned her Masters in Applied Economics from Johns Hopkins University in 2014. She has a Certificate or Forecasting Practice from the International Institute of Forecasters. Helen has written for TTX Company, FTR, and the Intermodal Association of North America. Helen lives with her husband and their bulldog. When she isn’t writing about logistics, she can be found practicing krav maga.

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