The US economy faces risks from a potential resurgence of COVID-19 and from the failure so far of the US Congress to provide additional financial support for struggling individuals and businesses.
That judgement emerged from a survey released yesterday by the National Association for Business Economics (NABE) of 52 forecasters who were polled last month.
Among the forecasters, 55 percent said they regarded a second wave of COVID-19 cases as the most serious threat.
Twenty percent said they thought a lack of further government economic aid would pose the biggest risk.
The inability of Democrats and Republicans to forge a compromise has meant that unemployed Americans are no longer receiving a federal unemployment benefit. Support for small businesses has also expired. States and localities, many of which have suffered sharp declines in tax revenue, are struggling, too, without further federal assistance.
Similar to many other economists, the NABE’s forecasters have estimated that the US economy, as measured by GDP, grew at a 25 percent annual rate in the July-to-September quarter. That would be the largest quarterly gain on records dating to 1947.
However, it would follow an even bigger contraction in the April-to-June quarter, when COVID-19 paralyzed much of the US economy.
For the current quarter, the NABE panel forecast a 4.9 percent annual growth rate.
The recovery from the pandemic recession, in the view of the forecasters, would remain sluggish in coming months. A majority of them do not expect GDP to return to its pre-pandemic levels until sometime in 2022.
For all of this year, the panel expects GDP to decline 4.3 percent. That would be the US economy’s first full-year contraction since a 2.5 percent fall in 2009 at the end of the Great Recession.
For next year, the forecasters expect growth of 3.6 percent.
“NABE panelists have become more optimistic, on balance, but remain concerned about a potential second-wave of COVID-19,” said Eugenio Aleman, an economist at Wells Fargo Bank and the chair of the NABE survey panel.
On the danger that the US economy might suffer a double-dip recession, in which GDP would shrink again, 51 percent of the forecasters estimated the chances at 20 percent or less. Only 12 percent saw the likelihood at 50 percent or more.
More than half the panelists believe that 10 to 20 percent of the jobs that have been lost to the pandemic recession are permanently gone, with many hotels, restaurants, retailers and entertainment venues unable to reopen.
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