Confused About the Economic Recovery? Here's Why...

By
Real Estate Agent with Future Home Realty Florida SL3200947

Courtesy © Keeping Current Matters

As we continue to work through the health crisis that plagues this country, more and more conversations are turning to economic recovery. While we look for signs that we’ve reached a plateau in cases of COVID-19, the concern and fear of what will happen as businesses open up again is on all of our minds. This causes confusion about what an economic recovery will look like. With this in mind, it’s important to understand how economists are using three types of sciences to formulate their forecasts and to work toward clearer answers.

  1. Business Science – How has the economy rebounded from similar slowdowns in the past?
  2. Health Science – When will COVID-19 be under control? Will there be another flareup of the virus this fall?
  3. People Science – After businesses are fully operational, how long will it take American consumers to return to normal consumption patterns? (Ex: going to the movies, attending a sporting event, or flying).

Sam Khater, Chief Economist at Freddie Mac, says:

“Although the uncertainty of the crisis means forecasts of economic activity are more unclear than usual, we expect that most of the economic damage from the virus will be contained to the first half of the year. Going forward, we should see a recovery starting in the second half of 2020."

This past week, the Bureau of Economic Analysis released the advanced estimate for Gross Domestic Product (GDP) for the first quarter of 2020. That estimate came in at -4.8%. It was a clear indicator showing how the U.S. economy slowed as businesses shut down and consumers retreated to their homes in fear of the health crisis and of contracting COVID-19.Confused About the Economic Recovery? Here’s Why. | MyKCMExperts agree that the second quarter of 2020 will be an even greater slowdown, a sign more businesses are feeling the effects of this health crisis. The same experts, however, project businesses will rebound, and a recovery will start to happen in the second half of this year.

Bottom Line

As time goes on, we’ll have more clarity around what the true economic recovery will look like, and we’ll have more information on the sciences that will affect it. As the nation’s economy comes back to life and businesses embrace new waves of innovation to serve their customers, the American spirit of grit, growth, and prosperity will be alive and well.

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economy
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Rainmaker
4,320,014
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Lea, great post to clarify the market and how it will proceed as we slowly get back to normal.

May 05, 2020 10:32 AM #1
Rainmaker
808,971
Bruce Walter
Keller Williams Realty Lafayette/West Lafayette, Indiana - West Lafayette, IN

Welcome to Active Rain, Lea and thanks for following me.  As a former HS Economics teacher I just love posts like this and the 2nd quarter GDP results will vary by region reflecting the impact of the virus and the state's reactions how to deal with it.  Overall it will be down for sure as projected.

May 05, 2020 11:20 AM #2
Rainmaker
3,333,805
Lawrence "Larry" & Sheila Agranoff. Cell: 631-805-4400
The Top Team @ Charles Rutenberg Realty 255 Executive Dr, Plainview NY 11803 - Plainview, NY
Long Island Home and Condo Specialists

So many changes are happening daily, and so much more clarity is needed around the economic recovery!

May 05, 2020 02:31 PM #3
Rainmaker
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Sheri Sperry - MCNE®
Coldwell Banker Realty - Sedona, AZ
(928) 274-7355 ~ YOUR Solutions REALTOR®

Hi Lea Lagueux - You are so right, we will have a clearer picture in time.  But we should stay on top of what is happening right now.  Thank you also for the follow!

May 05, 2020 05:08 PM #4
Rainmaker
5,775,735
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Thank you very much for sharing this report.

Have a very productive month.

May 06, 2020 06:04 AM #5
Ambassador
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Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
The right Charlotte REALTOR!

I'm so positive about this recovery - I know we are nowhere near where we were in 2008. This is a whole new animal and this time, we are not responsible!

Great seeing you today, Lea! I hope you learned something and will keep coming back on Tuesdays at 2:00.

May 12, 2020 07:14 PM #6
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Lea Lagueux

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