Forecasters expect the U.S. economic recovery to remain on track following the presidential election, with a potential coronavirus vaccine and a new fiscal stimulus package in sight, a new Wall Street Journal survey shows.
The survey also shows that the amount of stimulus the economy needs to recover from the coronavirus shock is more modest than many lawmakers have suggested after the economy outperformed expectations in the third quarter. The survey of 65 business and academic forecasters was conducted Nov. 6-10.
Forecasters see an unemployment rate of 6.7% at the end of this year, down from 7.8% in last month’s survey. They now expect gross domestic product to contract 2.7% this year, measured from the fourth quarter of 2019, an improvement from the 3.6% contraction they predicted last month. They forecast expansions of 3.6% in 2021 and 2.9% in 2022, only slightly slower than in the prior month’s survey.
Most economists say some further fiscal aid remains likely, with some saying the prospect of renewed lockdowns as coronavirus infections rise across the country could spur lawmakers to strike a deal.
“Economic damage from a second wave is raising pressure for stimulus,” said Lynn Reaser, chief economist at Point Loma Nazarene University. “Many unemployed and small businesses are struggling to survive.”
