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The bumpy road ahead: COVID-19 will hurt the US economy, but a recession call is still a stretch

The US economy started 2020 on a strong footing, but the rapid spread of COVID-19 has raised anxieties and rattled markets. The Conference Board expects a sizeable disruption to certain areas of the economy. Startled by the virus, we expect consumer spending to contract by 1.7 percent in Q2. Combined with other impacts, we forecast that real GDP growth will contract by 1.0 percent that quarter. The economy should then rebound in the second half of 2020. For the year as a whole, we expect real GDP growth to fall to 1.4 percent, which is more than 0.5 percent lower than our last forecast. We do not expect a full-fledged recession in 2020, unless new COVID-19 cases continue to climb after April.

Economic forecasting in times of crisis, especially in the middle of evolving events, is daunting. While one cannot argue with any certainty how the COVID-19 outbreak will take shape over the coming months, The Conference Board’s latest economic forecast assumes that the number of new cases will peak in April and then begin to diminish.

Real GDP growth is expected to contract by 1.0 percent in the second quarter. We expect a sizeable disruption to certain parts of the economy over the coming two to three months – most notably travel, tourism, hotels, restaurants and industries which are heavily dependent on global supply chains. In particular, we forecast consumer spending to contract by 1.7 percent in the second quarter.

The economy should begin to return to its long term trajectory in the second half of 2020 as consumer spending rebounds. For the year as a whole we expect real GDP growth to fall to 1.4 percent from 2.3 percent in 2019. However, we currently see a full-fledged recession as the less likely outcome provided that new COVID-19 cases peak by the end of April.

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Our Experts

Thought leaders who provide trusted insights for navigating companies and the economy though COVID-19.

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Bart van Ark

Outgoing Chief Economist; Program Director, CFO: Fortune 250 Council

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Lynn Franco

Director, Economic Indicators and Surveys

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Ataman Ozyildirim, PhD

Director, Economic Research, and Global Research Chair

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Matteo Tonello

Managing Director, Environmental, Social, and Governance (ESG)

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Gad Levanon, PhD

Vice President, Labor Markets

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David Hoffman

Senior Vice President Asia and Managing Director of the China Center for Economics & Business

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Rebecca L. Ray, PhD

Executive Vice President, Human Capital

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Anke Schrader

Senior Researcher

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Amy Lui Abel, PhD

Vice President, Human Capital Research

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Thomas Singer

Principal Researcher

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Dr. Uwe G. Schulte

Leader, Global Sustainability Centre and Program Director

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Paul Washington

Executive Director, ESG Center

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Ilaria Maselli

Senior Economist

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Amanda Popiela

Researcher, Human Capital

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Elizabeth Crofoot

Senior Economist, Labor Markets

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John Forsyth

Leader of the Consumer Dynamics Institute

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Cindy Cisneros

Vice President of Education Programs

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Steve Odland

President and CEO

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Jeff Hoffman

Institute Leader, Corporate Citizenship & Philanthropy, ESG Center

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Joseph J. Minarik

Senior Vice President and Director of Research

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Erik Lundh

Senior Economist

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Robin Erickson, PhD

Principal Researcher

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JP Kuehlwein

Marketing Institute Leader

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Denise Dahlhoff, PhD

Senior Researcher, Consumer Research

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Laura Sabattini, PhD

Principal Researcher, Human Capital

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Robert Schwarz

Senior Researcher, ESG Center

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Chiqui Cartagena

Chief Marketing Officer & Center Leader, Marketing & Communications

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Dr. Mahdy Al Jazzaf

Executive Director

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Devin O’Connor

Deputy Director, Economic Research

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