The Myth of the V-Shaped Recovery – By Andrew Soergel (US News) / April 17 2020
Hopes for a quick economic bounce back from the coronavirus are looking bleaker by the day as governors grapple with when to reopen their economies.
The economic costs of the coronavirus pandemic are mounting, with much of the U.S. under strict lockdown measures that have limited travel, shuttered businesses and obliterated consumer confidence.
The White House has optimistically projected that the economy will bounce back strongly and swiftly, with a partial economic reopening beginning as soon as next month. But many analysts say that absent a more coordinated federal strategy, widespread testing capabilities and proven treatment and vaccination options, it is difficult to determine how and when the U.S. economy will fully emerge from hibernation.
“If you are thinking that everything’s going to be back to normal by May, I think I would be quite pessimistic about that,” William Hanage, an associate epidemiology professor at Harvard University, said this week during a webinar hosted by the U.S. Chamber of Commerce Foundation, suggesting a “new normal” may be established by the summer but that “large gatherings of people are probably not going to be safe for really quite some time.”
President Donald Trump has set his sights on next month as a target for reopening, after pushing back an initial goal for a reemergence in mid-April. Many experts, however, think it will be later into the summer before many Americans return to work.
“Hopefully it will be sooner rather than later,” JPMorgan Chase CEO Jamie Dimon said Tuesday during an earnings conference call. “But it won’t be May. We’re talking about June, July, August – something like that.”
And even then, workers are not expected to resume business as usual, as restrictions on travel, requirements for public hygiene and rules that govern how many people can occupy indoor spaces at the same time are likely to remain in place. Lewis Alexander, chief U.S. economist at Nomura, wrote in a research note on Tuesday that he expects a modest economic recovery in the second half of 2020 but that the U.S. won’t see “a more robust rebound until social distancing measures are eased more fully in 2021.”
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