US economy already in recession amid COVID-19 pandemic: survey

Washington, April 11 The US economy is already in a recession and will remain in contraction for the first half of 2020 due to the COVID-19 pandemic, according to a survey released by the National Association for Business Economics (NABE).

“The consensus is real GDP (gross domestic product) declined at an annualized rate of 2.4 per cent in the first quarter of 2020, and will shrink at an annualized rate of 26.5 per cent in the second quarter,” NABE President and KPMG Chief Economist Constance Hunter said in a statement on Friday, Xinhua news agency reported.

“The panel is optimistic about a return to economic growth in the latter half of 2020, anticipating an annualized real GDP growth rate of 2.0% in the third quarter,” she said.

The survey of 45 economists, conducted April 3-7, showed that the US unemployment rate is expected to spike to 12 per cent in the second quarter, with a loss of 4.58 million jobs on average for the monthly nonfarm payroll employment. But the unemployment rate is expected to fall back to 9.5 per cent at the end of 2020.

“Despite a sharp deterioration in labor market conditions, the median forecast suggests conditions will improve by the end of the year with support from aggressive fiscal and monetary stimulus, as panelists expect the Federal Reserve to hold steady on near-zero interest rates through 2021,” Hunter said.

The survey came after the US Labor Department reported Thursday that 6.6 million Americans filed initial jobless claims last week, bringing the three-week total to a staggering 16.8 million and underscoring the mounting economic fallout from the COVID-19 pandemic.

The Federal Reserve on Thursday unveiled new programs to provide up to US $2.3 trillion in loans to help households, businesses, state and local governments to weather the pandemic.

“The Fed’s role is to provide as much relief and stability as we can during this period of constrained economic activity,” Fed Chair Jerome Powell said, adding the central bank will continue to use its tools to help shepherd the economy through this difficult time.