The GDPNow outlook is now showing a 52.8% tumble, following data Monday that manufacturing in the U.S. remains firmly in decline and will weigh on investment and consumption.
The one bright side of the even steeper slide is that it could point to a sharper recovery at least in the short term, said Ed Yardeni of Yardeni Research. He projects the third quarter to see a 20% rebound followed by a 5% gain in the fourth quarter."Beyond that, we agree that it could be a swoosh with low single-digit growth rates. We don't expect that real GDP will recover back to its Q4-2019 record high until late 2022," Yardeni said in his morning note Tuesday.
Friday's nonfarm payrolls report is expected to show that another 8.3 million Americans lost their jobs in April, bringing the unemployment rate to 19.5%. That's on top of the 20.5 million payrolls drop in March and a 14.7% jobless level. "So the initial V-shaped rebound could eventually turn out to be a swoosh," Yardeni said. "This outlook allows for the possibility of a second wave of COVID-19 infections, though not as bad as the first wave and without another round of lockdowns."
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