This post was originally published on this site
As the U.S. battles a health and economic crisis, some economists are bullish that U.S. GDP will grow at a faster rate within three years than in the days before the coronvirus pandemic. .
Before the pandemic caused business lockdowns, U.S. GDP had been growing at 2.1% annualized pace in the fourth quarter of 2019, until it plunged by 4.8% in the first quarter this year, the biggest contraction in 12 years.
Economists surveyed by the Federal Reserve Bank of Philadelphia are predicting that the decline will accelerate to 5.6% this year, but they expect GDP to recover to an annualized rate “of between 2.2% to 4.1% over each of the following three years.”
The 42 economists surveyed are also optimistic that the U.S. unemployment rate which in April spiked to 14.7%, will be below 10% by 2021. By 2023, unemployment they predict will be 5.1%.
The forecasts contrast with predictions made by Minneapolis Fed President Neel Kashkari, who said on Thursday that “the V-shaped recovery is off the table,” adding that the economy will be “nowhere near back” to where it was in December 2019 anytime soon.
Other economists are predicting a recovery that resembles a square-root symbol on a graph. Though the path to recovery may be hindered by heightened international trade tensions between the U.S. and China.
