By Staff Reports
(Victor Valley)– Despite the tremendous economic costs of COVID-19 related closures, Beacon Economics‘ latest forecast for the U.S. and California continues to call for a strong, rapid recovery during the last half of 2020 – both for employment and output. Running counter to the of vast majority of forecasts, Beacon has been on record predicting a sharp second-half recovery for over two months. The new outlook, which is again rosier than most, is based on new data that indicate May’s numbers, once fully available, will be better than April’s.
“The pieces of data we see coming in for May suggest that the nation is already past the low point of economic activity and things are beginning to rebound,” said Christopher Thornberg, founding partner of Beacon Economics and one of the forecast authors. “Moreover, evidence continues to build that the third quarter will be even better and, despite dismal outlooks from many corners, we believe a “V” shaped recovery is already underway.”
The new outlook is based on the assumption that health mandated closures and restrictions will continue to ease. The new forecast predicts the U.S. economy will reach close to pre-virus levels of production by the end of 2020 and unemployment will decline to the 5% range. “The 2020 coronavirus recession will be one of the sharpest, but shortest, on record,” said Thornberg. Additionally, most of the job losses in California have occurred in lower-paying sectors of the economy, which have a disproportionately low impact on the state’s revenue streams, according to the forecast. https://beaconecon.com/publications/beaconomics/