Halfway there: An update on the US economic recovery

In the face of uncertainty about the US election, the potential for new waves of COVID-19, and looming fiscal cliffs, there is considerable anxiety about the path of the economy. Here are some of the key questions I’ve been asked recently and my answers.

Is the US economy healing?

To date, roughly half of the economic output and jobs lost during the early months of the pandemic have been recovered. In terms of economic activity, we have reached the depth of the downturn of the global financial crisis (GFC), from a level 2.5 times lower ( Figure 1 ). My view remains that the economy is continuing to heal, albeit at a reduced pace. Following the initial V-shaped turn, I expect declining momentum going forward as the reopenings slow, but then an eventual leg up once a vaccine is widely available (the so-called “swoosh” recovery named after the Nike logo). Next year, I think we could see the economy recover fully as activity normalizes... read the full article here

Views expressed are those of the author and are subject to change. Other teams may hold different views and make different investment decisions. The value of your investment may become worth more or less than at the time of original investment. While any third-party data used is considered reliable, its accuracy is not guaranteed. For professional or institutional investors only.