- Some 30 economists say there is a two-thirds probability that the economy wouldn’t be back to normal until 2022 or later—that’s essentially unchanged from what they were expecting in May, according to the most recent survey results from earlier this month.
- The economists’ October predictions around fourth-quarter GDP only slightly improved from what they expected back in June (growth of 4.9% vs. growth of 4.2%).
- FiveThirtyEight found economists have become more optimistic over time about one metric: the unemployment rate, which dropped from a record high of 14.7 in April much more quickly than experts were expecting.
WHAT WE DON’T KNOW
Allan Timmermann, an economics professor at the University of California San Diego who consulted on the survey, chalks the stagnating forecasts up to prolonged uncertainty about the course of the virus. It’s not clear when a vaccine will be widely available, and many businesses are still facing a precarious future, especially as the colder months put a dent in demand for leisure services.
“Uncertainty about the trajectory of the virus and its impact on service sectors such as hospitality, travel, entertainment, eating out, remains in the forefront and has not really been resolved at this point,” Timmermann told FiveThirtyEight.
WHAT TO WATCH FOR
Lawmakers in Washington have for months been unable to reach an agreement on what the next round of federal coronavirus aid should look like. Key benefits from March’s $2.2 trillion CARES Act, like supplemental federal unemployment checks and relief for small businesses, have already expired. Earlier this month, Federal Reserve Chairman Jerome Powell warned of potentially “tragic” consequences if Congress fails to pass additional relief measures.