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Economists Warn U.S. GDP Won’t Recover To Pre-Pandemic Levels Until 2022
The United States remains stuck in a recession and it will likely take years for economic growth to return to pre-coronavirus pandemic levels, economists surveyed by the National Association for Business Economics (NABE) warned on Monday.
KEY FACTS
About half of the respondents in the NABE’s August 2020 Economic Policy Survey said that U.S. GDP—the broadest measure of the economy—won’t return to its pre-pandemic level until 2022 or later.
Two-thirds of economists said that the U.S. economy continues to be in a recession that began last February, while others believe that the recession will end in 2020 (35%) or sometime in 2021 (34%).
80% of respondents indicated that there is also at least a one-in-four chance of a ‘double-dip’ recession, which would mean that the economy worsens again before fully recovering.
The survey also showed strong approval of the Federal Reserve’s actions to shore up the economy, injecting trillions of dollars so far: 77% of panelists said that the Fed’s current stance of aggressively easing monetary policy is “about right,” the highest approval rating in over 13 years.
One in five respondents view Fed policy as “too stimulative,” while only 2% said that it is “too restrictive.”
Economists were split on whether Congress’ fiscal response to the recession has been adequate, however: 40% response called it “insufficient,” 37% called it “adequate” and 11% said it was “excessive.”
BIG NUMBERS
Nearly 75% of NABE respondents said that the optimal size for the next coronavirus stimulus package should be $1 trillion or greater, while 17% advocated for a smaller bill of less than $1 trillion.
SURPRISING FACT
A majority of experts also say that the U.S. job market won’t recover until 2022 at the earliest. 18% anticipate a labor market recovery in 2021, 41% not until 2022 and 34% not before 2023, according to the NABE’s survey.
WHAT TO WATCH FOR
The upcoming 2020 presidential election could further influence U.S. economic growth, respondents said. A majority (62%) believe that former Vice President Joe Biden would do a better job of promoting economic growth than President Trump (25%). “Panelists were asked to select the three most important policy issues that the next presidential administration should address during its first year in office,” said Survey Chair Gregory Daco, chief U.S. economist for Oxford Economics. “Combating COVID-19, promoting economic recovery, and health policy were cited more frequently than a dozen other choices.”
KEY BACKGROUND
The NABE’s Economic Policy Survey summarized responses from 235 economists. The survey follows the National Bureau of Economic Research’s (NBER) determination that the U.S. economy fell into a recession in February, as the coronavirus pandemic resulted in large-scale business shutdowns and layoffs.
The United States remains stuck in a recession and it will likely take years for economic growth to return to pre-coronavirus pandemic levels, economists surveyed by the National Association for Business Economics (NABE) warned on Monday.
KEY FACTS
About half of the respondents in the NABE’s August 2020 Economic Policy Survey said that U.S. GDP—the broadest measure of the economy—won’t return to its pre-pandemic level until 2022 or later.
Two-thirds of economists said that the U.S. economy continues to be in a recession that began last February, while others believe that the recession will end in 2020 (35%) or sometime in 2021 (34%).
80% of respondents indicated that there is also at least a one-in-four chance of a ‘double-dip’ recession, which would mean that the economy worsens again before fully recovering.
The survey also showed strong approval of the Federal Reserve’s actions to shore up the economy, injecting trillions of dollars so far: 77% of panelists said that the Fed’s current stance of aggressively easing monetary policy is “about right,” the highest approval rating in over 13 years.
One in five respondents view Fed policy as “too stimulative,” while only 2% said that it is “too restrictive.”
Economists were split on whether Congress’ fiscal response to the recession has been adequate, however: 40% response called it “insufficient,” 37% called it “adequate” and 11% said it was “excessive.”
BIG NUMBERS
Nearly 75% of NABE respondents said that the optimal size for the next coronavirus stimulus package should be $1 trillion or greater, while 17% advocated for a smaller bill of less than $1 trillion.
SURPRISING FACT
A majority of experts also say that the U.S. job market won’t recover until 2022 at the earliest. 18% anticipate a labor market recovery in 2021, 41% not until 2022 and 34% not before 2023, according to the NABE’s survey.
WHAT TO WATCH FOR
The upcoming 2020 presidential election could further influence U.S. economic growth, respondents said. A majority (62%) believe that former Vice President Joe Biden would do a better job of promoting economic growth than President Trump (25%). “Panelists were asked to select the three most important policy issues that the next presidential administration should address during its first year in office,” said Survey Chair Gregory Daco, chief U.S. economist for Oxford Economics. “Combating COVID-19, promoting economic recovery, and health policy were cited more frequently than a dozen other choices.”
KEY BACKGROUND
The NABE’s Economic Policy Survey summarized responses from 235 economists. The survey follows the National Bureau of Economic Research’s (NBER) determination that the U.S. economy fell into a recession in February, as the coronavirus pandemic resulted in large-scale business shutdowns and layoffs.
