US: The horror version – Rabobank

While the outlook for 2020 remains sketchy, heavily dependent on non-economic factors, economists at Rabobank expect the US GDP to fall by 6% in 2020. 

Key quotes

“With a slowdown in February and a sharp contraction of the economy in March, we expect GDP growth in Q1 to be negative (-5% quarter on quarter at an annualized rate).”

“The most extreme economic growth figure is likely to be Q2 GDP growth with the lockdown continuing through at least April and likely May. If we look at the industries affected, we estimate that GDP growth could fall by 31% quarter-on-quarter at an annualized rate.”

“We estimate that the rebound would be 14% quarter-on-quarter at an annualized rate in Q3. This is still another unusually large number, but it is the echo of the supply effect in Q2, muted by demand constraints.”

“We expect a modest decline in GDP growth of 1% in Q4. That would give us a W-shaped recovery or even a double dip recession. If we look at the year as a whole we expect -6% growth in 2020.”

“We expect 8.5% unemployment by the end of the year.”