Coronavirus fears lead to unexpected recession
According to UCLA economic forecast
City News Service | 3/20/2020, midnight
The U.S. economy is in a recession expected to last through September, according to a revised forecast released this week by UCLA that reflects rapid changes brought on by the coronavirus.
The university took the extraordinary step of revising its quarterly Anderson Forecast that was released on March 12—the first time in 68 years it has issued an update between regularly scheduled quarterly releases.
The first-quarter 2020 GDP growth forecast has been reduced to 0.4 percent given the escalating impacts of the pandemic, despite a strong start to the year. The forecast predicts a resumption of normal activity in the fourth quarter, with GDP growth of 4 percent. The full year expectation is for a 0.4 percent decline, with a full recovery to trend by 2022.
Researchers made the revision after reviewing the 1957-58 H2N2 influenza pandemic.
For California, given its larger reliance on tourism and trans-Pacific transportation, the downturn is expected to be more severe, according to the forecast. Employment is expected to contract by 0.7 percent overall this year, with unemployment rising to 6.3 percent by the end of this year and increasing into 2021