This year has been unprecedented. We’ve had a global pandemic, worldwide economic turmoil, natural disasters, etc…We’ve all been left reeling. There has been market unrest with many ups and downs, and many investors are reluctant to make a move. How can Americans expect the U.S. economy to perform for the remainder of 2020?
According to global research firm Deloitte Insights, the U.S. lost more than 20 million jobs in March and April with entertainment, recreation services, arts, accommodation, and food services taking the biggest hits. All U.S. private-sector jobs saw significant losses.
What is driving the economic downturn? Deloitte believes it is driven by a decline in consumer spending. The GDP fell over 17% during the first and second quarters of 2020. The research firm also believes a decline in investment spending is likely to continue for the remainder of 2020.
Some economists are hopeful for a rebound this quarter, but it will depend on several factors.
COVID-19 treatments and the development of a vaccine
A U.S. economic rebound for the remainder of 2020 is tied to the potential of a successful vaccine for COVID-19. New treatments for the disease are promising; however, even after a vaccine is developed, there will still be challenges with the manufacture and deployment of a global vaccine.
Lockdowns and unemployment
As many areas of the United States face past, present, and possibly future lockdowns, unemployment will continue to play a factor in economic recovery. Many businesses may not survive and will ultimately close their doors, leading to more unemployment. That will have effects similar to a traditional recession where people will be unable to afford to spend money on new homes, automobiles, and other goods or services.
Trust in government and businesses
People must again trust the government and businesses to keep them safe and protect their information with a secure way of transacting business. If this happens, it could help speed an economic recovery.
Considering all of these factors, it is still likely that economic growth and recovery will be slow for several more quarters before we see a rebound in the U.S. and global economies.