April 13, 2020 — Dire Forecast for Q2, but Hope for a Q3 Rebound

APRIL 13, 2020 – DIRE FORECAST FOR Q2, BUT HOPE FOR A Q3 REBOUND

As economists throw modeling out the window, in what we hope is a once in a lifetime event,  JPMorgan is expecting a 40% decline in GNP for the second quarter and an unemployment rate of 20% in April, with the US having lost 25 million jobs.

However, there is still faith in the ability of the economy to regain some of the losses before year’s end.  The expectation is for growth of 23% in the third quarter, followed by a 13% increase in the fourth, assuming Americans start moving back to something resembling a normal business environment.  The unemployment rate should start falling soon after, and is expected to be in the 12-13% range by the end of the summer, then around 9% by year end.

Pent up consumer demand is hoped to spur spending, and the Fed is expected to hold interest rates at zero for the rest of the year and into the beginning of 2021. Forward LIBOR is expected to be .25%.

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