US Congressional Budget Office said in a report yesterday the economy is expected to “begin recovery during the second half of 2020”. Labor market is projected to “materially improve after the third quarter”. Though, “the persistence of social distancing will keep economic activity and labor market conditions suppressed for some time.”
In the new projections, GDP would contract by an annualized rate of -37.7% in Q2. Though, the economy is expected to pick up during H2 and rebound by averaged annualized rate of 15.8%. For 2020 as a whole, GDP could contract by -5.6% in 2020, followed by 4.2% growth in 2021.
Unemployment rate is projected to peak at an average of 15.8% in Q3. At the mean time, participation rate, has already dropped by -3.2% to 60.2% in April. It’s expected to recovery slightly to 61.1% in Q3 only, and edge further higher to 61.5% in 2021.
