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In the past three months, the outlook for the US economy has improved in the eyes of business economists.
However, optimism is somewhat expressed by the resurgence of the coronavirus.
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A survey by the National Association for Business Economics released Monday finds “a significant drop in expectations for depths reached in almost all categories in April,” according to Megan Greene, a senior Harvard member who leads the NABE survey of commercial terms.
The results of the survey of 104 NABE members showed that growth expectations had increased considerably, and two-thirds of them forecast that the economy, measured by gross domestic product, will grow between the second quarter of this year and the second quarter. of the next.
That’s a change from three months ago when 70 percent of them had predicted that the economy would shrink in the next 12 months.
The economy entered a recession in February, ending a record expansion of nearly 11 years. During the January-March quarter of this year, the government estimates that GDP fell at an annual rate of 5 percent.
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Markets could be shocked this week when the government issues its first GDP estimate for the April-June quarter.
The consensus forecast is that it will report that the economy contracted at an annual rate of more than 30 percent.
That would be by far the largest economic contraction on record: more than triple the worst quarterly decline today, which occurred in 1958.
The NABE survey is based on responses received from July 2 to 14, a period when coronavirus cases began to increase in many parts of the country after companies reopened.
Since then, the impact of the pandemic has greatly worsened, and the number of reported cases has increased considerably.
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Despite the increase in virus cases, the NABE survey found that business economists’ prospects for the next three months compared to the previous survey in April showed an improvement in sales, profit margins, prices , employment and capital spending.
The survey found that one in three companies had resumed normal operations, but that nearly the same number of respondents said they did not expect their businesses to return to normal levels for more than six months.
A sizable proportion of respondents said they believe the virus will lead to more flexible hiring and work arrangements, and 80 percent said they expect their companies to continue to provide some degree of remote work for employees even after the end of the crisis.
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The unemployment rate in the United States, which had been at a 50-year low of 3.5 percent before the virus attack in March, shot up to 14.7 percent in April and has since dropped to 11.1 percent still high. The NABE survey found that 58 percent of respondents think that even by June of next year, the unemployment rate will remain high between 6.1 and 8 percent.
A large majority (85 percent) said they believe their companies could “stay afloat” for more than six months without federal assistance, a 74 percent increase that said in April.
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Congress is involved in difficult negotiations over a new rescue aid package. Republicans are proposing, among other things, to reduce a temporary federal unemployment benefit that expires from $ 600 per week to approximately 70 percent of the recipient’s pre-pandemic wages. Democrats have adopted a much broader aid package that would include a $ 600 per week benefit extension.
Associated Press contributed to this article.
