The Dawn of an Economic Recovery

Right now, we seem to be getting lots of highs and lows in the news. Sometimes we hear that we are starting to see an economic recovery, and other times, we hear that we are seeing the worst economic date of all times.

We need to have some understanding of what is going on, and what all the information we are getting means on the road ahead. We have seen what the experts are talking about and what to expect in the for the second half of this year, and today, that progress depends largely on the continued course of the virus.

A recent Wall Street Journal survey of economists noted, “A strong economic recovery depends on effective and sustained containment of Covid-19.” Given the uncertainty around the virus, we can also see what economists are forecasting for GDP in the third quarter of this year (see graph below):

The economists are overwhelmingly forecasting GDP growth in the third quarter of 2020, with 5 of the 9 experts projecting over 20% growth.

Lisa Shalett, Chief Investment Officer for Morgan Stanley puts it this way:

“Indeed, the ‘worst ever’ GDP reading could be followed by the ‘best ever’ growth in the third quarter.”

As we look forward, we can expect consumer spending to improve as well. According to Opportunity Insights, as of August 1, consumer spending was down just 7.8% as compared to January 1 of this year.

BOTTOM LINE

An economic recovery is beginning to happen throughout the country. While there are still questions that need to be answered about the road ahead, we can expect to see improvement this quarter.