Friday, April 24, 2020 | 4:27 pm
An updated outlook from prominent economist Christopher Thornberg makes the case that the U.S. economy’s path out of the COVID-19 crisis will look like a sharp V, with a huge decline in the second quarter followed by a strong, rapid surge in the third.
Thornberg, who is Founding Partner of Beacon Economics and Director of the UCR School of Business Center for Economic Forecasting, argues that many of the most dire predictions of economic Armageddon are excessively negative – and when examining basic questions that determine how rapidly the economy can bounce back, it all adds up to a better recovery and less long-term damage than most are predicting.
In total, Thornberg anticipates that the U.S. economy will contract by an annualized rate of 30% to 40% in the second quarter. He then forecasts a 25% surge in U.S. GDP in the third quarter, settling to 5% in the fourth.
“All forecasts right now, at some level, are a leap in the dark, but I think the frightening and unprecedented nature of the Coronavirus crisis has led to some overly negative predictions,” said Thornberg. “When we analyze the basic economic questions that approximate how much sustained damage will be generated from the halt in economic activity, we do not arrive at the conclusion that there will be an extended contraction.”