April 10, 2020 / BY VINCE GOLLE AND SARINA YOO / BLOOMBERG
Economists expect the U.S. to suffer its largest-ever contraction this quarter and the unemployment rate to soar to a post-Depression record, followed by a recovery that will be moderate and drawn out.
Gross domestic product will plummet an annualized 25% from April through June after a smaller setback in the first quarter and the jobless rate will hit 12.6%, the highest since the 1940s, according to the median forecasts in Bloomberg’s monthly survey of 69 economists.
That’s dispiriting given a massive government fiscal relief effort and Federal Reserve actions aimed at shoring up the financial system, as health experts urge social distancing to combat the spread of the disease.
The downturn looks likely to be deemed as the first recession since 2007-2009 by U.S. business-cycle arbiter National Bureau of Economic Research. The second half of the year will see a resumption of growth, according to the survey, though economists say the deck is stacked against a snap-back. The Fed is expected to keep interest rates near zero until the first half of 2022.