The Conference Board Economic Forecast for the US Economy - June 2020 | The Conference Board
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U.S.ECONOMIC OUTLOOK

The Conference Board Economic Forecast for the US Economy - June 2020

The second estimate of first quarter 2020 GDP shows a contraction of 5.0 percent (annualized) over the last quarter of 2019. Given the timing of COVID-19 and the ‘lockdown’ seen around the country, however, we expect to see a much deeper contraction in Q2 with the worst pain concentrated in April. 

May and June, fortunately, will show a fairly strong rebound as the economy comes back online and solid progress will continue to be made over the summer. However, monthly economic output in September will still be approximately 6 percent lower than it was in December 2019, before the pandemic hit. Growth in Q4 will likely slow further as consumer spending struggles to return to the levels seen in 2019.

The Conference Board is adopting a “swoosh” shaped scenario as our base forecast. We expect second quarter GDP to decline by almost 40 percent (annualized). This large drop is driven by a fall in consumer spending of nearly 50%, a drop in real capital spending of just over 20% and a fall in exports of more than 35%. Following a large rebound of over 30 percent in Q3, we expect slower growth in Q4 that will bring December 2020 economic output to about 95% of what it was a year earlier.

On the basis of this updated forecast, GDP will contract by 5.7 percent for 2020 on the whole. However, the more rapidly the economy reopens the greater the risk that we experience a COVID-19 resurgence that would require implementation of containment measures. This would result in a W-shaped scenario that would hurt fourth quarter growth and extend this economic crisis into 2021.



The US Economic Forecast

THE CONFERENCE BOARD ECONOMIC OUTLOOK, 2018-2019-2020
Percentage change, seasonally adjusted annual rates (except where noted)


 2018201920202018201920202021
 
1st 
half
2nd half
1st half
III Q* IV Q* 2nd half
I Q*
II Q 1st
half
III Q IV Q
2nd half
Real
GDP
3.0 2.0 2.6 -2.1 2.1 2.1 -5.0 -39.5 -22.3 32.2 7.8 20.0 2.9 2.3 -5.7 6.1
Real
Consumer
Spending
2.8 2.5 2.8 3.1 1.8 2.5 -6.8 -48.6 -27.7 44.2 8.0 26.1 3.0 2.7 -7.7 4.8
Residential
Investment
-4.5 -4.3 -2.0 4.6 6.5 5.6 18.5 -25.0 -3.3 -5.0 5.0 0.0 -1.5 -1.5 0.1 2.0
Nonresidential Investment 8.3 3.5 1.7 -2.3 -2.5 -2.4 -7.9 -20.9 -14.4 1.2 5.1 3.1 6.4 2.1 -6.5 3.1
Inventory Change 6.3 90.1 92.7 69.4 13.1 41.3 -67.2 -150.0 -108.6 5.0 24.0 14.5 48.2 67.0 -47.1 100.0
Total Government Spending 2.2 0.8 3.9 1.7 2.5 2.1 0.8 4.0 2.4 4.0 4.0 4.0 1.7 2.3 2.7 4.0
Exports 3.3 -2.4 -0.7 0.9 2.1 1.5 -8.7 -35.1 -21.9 11.1 9.0 10.1 3.0 0.0 -8.0 6.9
Unemployment Rate 4.0 3.8 3.8 3.6 3.5 3.6 3.8 16.0 9.9 13.6 10.8 12.2 3.9 3.7 11.1 10.8
CPI Inflation 2.7 1.7 2.0 1.8 2.4 2.1 1.2 -2.0 -0.4 0.0 1.0 0.5 2.4 1.8 0.8 0.7
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