More and more economists are predicting a recession is imminent as the result of the pullback in the economy caused by COVID-19. According to the National Bureau of Economic Research:
“A recession is 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.”
Bill McBride, the founder of Calculated Risk, believes we are already in a recession:
“With the sudden economic stop, and with many states shutting down by closing down schools, bars and restaurants…my view is the US economy is now in a recession (started in March 2020), and GDP will decline sharply in Q2. The length of the recession will depend on the course of the pandemic.”
How deep will it go?
No one knows for sure. It depends on how long it takes to beat this virus. Goldman Sachs anticipates we will see a difficult first half of the year, but the economy will recover in thesecond half (see below):
Goldman also projects we’ll have “further strong gains in early 2021.” This aligns with the projection from Wells Fargo Investment Institute:
“Once the virus infection rate peaks, we expect a recovery to gain momentum into the final quarter of the year and especially into 2021.”
Again, no one knows for sure how long the pandemic will last. The hope is that it will resolve sometime over the next several months. Most agree that when it does, the economy will regain its strength quickly.
*Quarter 1 data from Goldman Sachs was updated from 0% to -0.2% on 3/17/20 after the initial release.
Bottom Line
This virus is not only impacting the physical health of Americans, but also the financial health of the nation. The sooner we beat it, the sooner our lives will return to normal. We hope you will agree with us in prayer for our nation. Below is a link to our local church, World Outreach Church, where we are being given prayers to pray on the hour for our nation.
https://wochurch.org/an-update-from-pastor-allen/
Prayer for today provided by Pastor Allen Jackson (taken from the link above)
Heavenly Father, we pray for our leaders—for all those in authority—our president, our governors, the leaders of our cities and towns—give them wisdom and understanding from You. Direct their decisions that we might live peaceful lives in godliness and holiness. Grant us a spirit of unity and cooperation. Silence the voices of division and hate. We are a land in need of healing. We have accepted your great blessings and enjoyed your protection but in our pride we have declared ourselves the source of these divine gifts. Forgive us of our pride, our arrogance and our idolatry. As your people we know you are a God of justice but also a God of great mercy and forgiveness. We come today in humility to acknowledge our sin and to repent before You. May your name be exalted and your Word honored across our nation — in the churches, in our homes, in our classrooms, in our courtrooms and throughout our government. In Jesus’ name, amen.
1 Timothy 2:1-4 (NIV)
1 I urge, then, first of all, that requests, prayers, intercession and thanksgiving be made for everyone– 2 for kings and all those in authority, that we may live peaceful and quiet lives in all godliness and holiness. 3 This is good, and pleases God our Savior, 4 who wants all men to be saved and to come to a knowledge of the truth.
Psalm 33:12 (NIV)
12 Blessed is the nation whose God is the LORD, the people he chose for his inheritance.