April 2, 2020 – Bank of America’s U.S. Economics Team revised their economic forecast this morning, and now thinks the U.S. economy will shrink 30% (on an annualized basis, translating to a 8.5% decline quarter-to-quarter) in Q2, with cumulative decline in GDP of 10.4% for the year.<\/p>\n\n\n\n
The report entitled “This Recession Takes The Crown”, indicated that based on the bank’s proprietary data, there was a sharp drop in spending on travel in early March, which spread quickly to recreational services (museums, theaters) and restaurants by mid-March.<\/p>\n\n\n\n
If the bank’s projection comes to pass, this level of decline will be the deepest recession on record and nearly five times more severe than the post-war average.<\/p>\n\n\n\n
Bank of America anticipates consumer spending to turn positive in Q3 but broader economic output will still experienced negative growth due to weak business sentiments and real estate investment.<\/p>\n\n\n\n
On the labor front, 16-20 million of jobs could be lost, peaking at 15.6% unemployment.<\/p>\n\n\n\n
On the Federal front, the bank expects an additional stimulus program to the tune of $2-2.5 trillion, bringing the total Washington assistance (not including Federal Reserve programs) to up to $5 trillion or 25% of U.S. GDP.<\/p>\n\n\n\n
Contact Karen Bigelow at KBigelow@buymuni.com.<\/p>\n","protected":false},"excerpt":{"rendered":"
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