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The Coronavirus Contraction

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First Trust Monday Morning OUTLOOK: The Coronavirus Contraction

It’s important to remember that certain parts of GDP will not feel a pinch, like the rental value of homes, health care, government purchases, or groceries. We’re guessing business investment in intellectual property will hold up well, too.

We don’t have to fully eradicate the Coronavirus to start growing again. The largest downward pressure on the economy is likely to be felt when the number of new cases is peaking. Once new cases have peaked, we’re likely to see a combination of either an easing of government restrictions or, informally, fewer businesses and customers complying with those restrictions. Implicitly, we’re projecting the growth in new cases will peak by mid-April, which is why we’re forecasting that economic activity levels off in May and grows beyond.

Download: First Trust Monday Morning OUTLOOK: The Coronavirus Contraction

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