22 May The COVID-19 Economy. Click to keep reading…
How will the pandemic affect the global economy? The Kiplinger Letter suggests that we can expect a GDP decline of -30% in Q2, and with a major rally, GDP may only reach -4% for the year. Unemployment will rocket to all time highs (from 4% to 20%), the worst level that the U.S. has seen since 1940. Consumer spending will virtually halt in the second half of 2020, and while some categories will see growth (groceries and health care), most others will suffer severe losses (auto sales, restaurants, retail, etc.). Business investment will also see a significant loss, by as much as 20%. Along with consumer spending, business spending will also decrease dramatically in response to the uncertainty created by the virus. Crude is trading from $10 to $20 per barrel in a volatile market.
There are too many variables in play to predict how severe the recession will be, or how long it will be, before a recovery kicks in.
Get updates on the latest economic forecasts at kiplinger.com/outlooks.