How much will GDP recover in 2020Q3?

Quite a bit

Real GDP took a historic one-quarter hit in 2020Q2 due to the coronavirus lockdown. But, we should see a pretty big bounce back in the coming quarter:

While GDPNow is just one prediction model, it’s got one of the best track records out there. It’s also fairly in line with most other forecasts.

While a solid bounce in Q3 is pretty much inevitable given the drop in Q2, more questions remain about the coming quarters. Do we see another dip, a slow rise, or a continuation of strong growth? It’s all very uncertain at this point and thus why some economists think we may not be back to the 2019 year-end economic peak until potentially 2022!

I think the coming weeks will be critical to answering the timing of all this, as the first few hints of economic data start to come in for 2020Q4. In particular, I’ll be watching jobs through the weekly release of initial claims. But, let’s also not discount the stock market to give us hints on the economy - it’s performance in late March suggested things wouldn’t be as bad as some feared and, maybe through luck, got it right. Finally, of course, daily COVID-19 numbers will also give us an indication for the future of the economy. Let’s continue to hope the health crisis abates.

More Metrics

Home prices took a huge hit in the last recession but not this one (yet)

Real estate was a big winner last week

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