The coronavirus crisis has almost certainly ended the longest U.S. expansion on record and pushed the economy into the start of a short slump, according to analysts polled by Reuters who gave a median 80per cent chance of recession this year.
But that will not be enough to prevent a recession, even though economists for now appear to think the blow will be punishing but temporary, with most expecting at least a modest rebound in the second half of the year. The U.S. economy was expected to grow 0.7per cent in the current quarter, about half the rate predicted in a Reuters poll published one month ago, and well below the last actual reported rate of 2.1per cent for the last three months of 2019.
In the poll, the majority who gave a prediction for the probability of recession had it above 50per cent, no doubt a reflection of the fact growth rates get revised well after recessions happen. "The baseline assumption is that the U.S. economy experiences the sharpest quarterly contraction since the global financial crisis in the second quarter, followed by strong sequential growth in the second half of the year," noted Sharmin Mossavar-Rahmani, chief investment officer at Goldman Sachs.
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