US to release advanced estimate of first quarter growth
The US Department of Commerce will today release its report on first quarter GDP growth. The figures are expected to paint a bleak picture of the US economy struggling even before it was shuttered in mid-March to prevent the further spread of COVID-19.
The report will likely show that the US economy contracted at least 3.7% in the first three months of 2020, the greatest quarterly contraction since early 2009. Experts warn that these findings will be only the tip of the iceberg—the data reflect economic conditions before the national economy was largely turned offline.
US state governments are formulating plans to gradually bring their economies back online, with some governors forming regional alliances to coordinate the re-opening. However, hyper-partisanship in Washington and tensions between governors and the Trump administration means that the next funding bill to relieve devastated state and local government budgets will be heatedly debated, and a delayed bailout of local governments is likely to weigh negatively on economic recovery.
The US will likely experience a serious recession through the third quarter of 2020, and partisan squabbling, global economic uncertainty and the threat of a second COVID-19 outbreak may undermine the quick rebound hoped for by policymakers in Washington.
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