MNI POLICY: No US Double-Dip Recession, Mid-2021 Recovery-NABE

U.S. GDP may return to pre-crisis levels by mid-2021 and the odds of a double-dip recession are low despite slowing job growth and rising Covid-19 cases, according to a National Association of Business Economics survey published Monday.

Half of a 52-person panel of members put the odds of a double-dip recession at 20% or less, while 12% said the chances of a double-dip are 50% or higher, according to the survey.

Nearly 40% of panelists indicated the economy should return to pre-pandemic GDP levels by the second half of 2021. While that was the most common answer, a majority see a prolonged recovery, with 32% expecting one in the first half of 2022 and 30% picking the second half of 2022.

"NABE panelists have become more optimistic, on balance, but remain concerned about a potential second wave of COVID-19," said Outlook Survey Chair Eugenio Aleman.

U.S. GDP fell at a record annualized rate of 31% in Q2, and the NABE panel expects output to fall 4.3% in 2020 and increase 3.6% in 2021. About two-thirds of panelists said growth risks are weighted to the downside, citing the pandemic followed by fiscal inaction.

The panel's median forecast for average monthly job gains through 2021 was 350,000, down from June's 497,000. The unemployment rate should average 8.4% in 2020, according to the panel, 2.5pp lower than June's forecast.