# That V-shaped economic recovery forecasters have been calling for? Don’t hold your breath
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That V-shaped economic recovery forecasters have been calling for? Don’t hold your breath
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Is the economy stuck in a rut?
iStockphoto
Hope for the V, but prepare for the L.
At this point, many analysts are clinging to the idea of a V-shaped recovery for the U.S. economy, even as volatility continues to roil markets. After all, the data has been mostly positive in recent months, and considering the recession resulting from the coronavirus pandemic was one of the deepest in a century, there’s room for more growth, especially when the next flood of fiscal stimulus hits from Congress.
Yardeni also raised his estimate for quarter-over-quarter growth in third-quarter GDP by 5 percentage points to 30% on an annualized basis and lifted his call for growth in fourth-quarter GDP by the same amount to 10%.
But a Bloomberg News analysis of 36 recessions going back to 1965 across the G7 countries, which is illustrated in this tweet, suggests the economy could remain in the L-shaped ditch for a while.
“With the world facing a second wave of COVID infections this winter, it’s not hard to imagine how the pandemic could inflict significantly more long-term damage than forecasters envisage,” Bloomberg’s Dan Hanson and Yelena Shulyatyeva wrote.
As for the latest temperature check on the economy, the number of Americans who applied for jobless benefits fell slightly in early October to a new pandemic low. They are, however, declining more slowly in a sign the labor market could be experiencing a setback amid another wave of corporate layoffs.
Meanwhile, the stock market was enjoying another day of gains, with the Dow Jones Industrial Average
DJIA,
Nasdaq Composite
COMP,
and S&P 500
SPX,
all pushing higher in Thursday’s session.
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