7 financial heavyweights have unveiled forecasts for a sudden US recession. Here's what they had to say about the economic damage coronavirus will cause.
- A number of Wall Street firms have said they expect the US to fall into a recession from the shock of the coronavirus pandemic.
- The National Bureau of Economic Research defines a recession as "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales."
- Here are all the firms that have said the US will fall into a recession - or is already in one- due to coronavirus.
- Read more on Business Insider.
As the coronavirus pandemic continues, economists have rushed to update forecasts with dismal outlooks for the US economy.
There's now a consensus that the shock of the coronavirus outbreak will push the US into a recession, ending the longest-ever economic expansion on record.
The National Bureau of Economic Research - the arbiter of any official recession calls - defines one as "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales."
Projections that US gross domestic product would falter have come from firms such as Goldman Sachs, Deutsche Bank, JPMorgan, Bank of America, and more. The labor market is also starting to show distress - on Thursday, data showed that in the week ending March 14, jobless claims rose by 70,000 to 281,000, exceeding economist estimates for an increase to 220,000.
As factories and stores are shuttered, there will likely be huge declines in manufacturing and consumer spending in the near future. Because the US consumer is a cornerstone of economic activity - spending makes up roughly 70% of US GDP - any dip could have a big impact.
Some firms have even gone so far as to say that the US isn't nearing a recession, it's already in one. On Monday, economists at the UCLA Anderson School of Management said that the US economy has already stopped growing and will likely remain in a recession until October. Banks have started to make similar calls - in a Thursday note, Bank of America economists led by Michelle Meyer said that the US has joined the rest of the world in a recession.
Here's a roundup of all the firms that have said that coronavirus will push - or has already pushed - the US economy into a recession, and their forecasts.
1. Goldman Sachs: US GDP -24% in 2Q, a record dop
2. Deutsche Bank: "The worst global recession since World War II"
3. JPMorgan: "Recession will rock the US and Europe by July"
4. Bank of America: "The US economy has fallen into recession"
5. Pacific Investment Management Co: "Inevitable recession"
6. Morgan Stanley: Base case is a global recession
7. UBS: Deep US recession by July
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