LANSING, Mich. — Experts are changing their predictions when it comes to the type of economic recovery the U.S. will have. Alicia Nieves takes a closer look at how experts view what will happen next with our economy.
When thinking about how the American economy will recover many turn to letters for answers Usually the letters VUL.
“V” stands for a v-shape recovery, a best-case scenario in which our economy comes out of this sharp downturn with businesses opening and everyone quickly going back to work, essentially an equally sharp bounce back. In, a U-shape recovery, the economy, including the labor market rebound just a little bit slower. *L*, is the dreaded scenario. It would mean we would linger in this downturn for quite a while, just barely crawling out of it after a long period of time.
“A lot of people are scared."
A few weeks ago we spoke to a group of economists and financial experts, most said then that they felt the U.S. would see that quick rebound, a “v” shape recovery “if everyone is really good about doing what needs to be done...It could be coming back into things as usual.”
Todd McCracken explained back in March that he believed that “We can turn this around this year, I still think there’s real hope for that.” But a lot has changed since March. “I don’t think that anymore". Todd McCraken now states as he is amongst those who now believe it will take the U.S. slightly longer to get jobs back, restore markets, and recover.
“I think the realization that most of us are in, is that even when this thing turns it is not going to turn uniformly across the country. So even if I as the business owner am ready to do business again, in my area where we flatten the curve or reduce the curve, it doesn’t follow that my vendors, my customers, my supply chain are in the same spot.”
McCraken believes we are most likely now to see a “u” shape recovery, and Many experts agree.[graphic]In fact in a recent Reuters poll of 50 economists, half the respondents predicta u shape recovery. With only a few experts, pointing to some less likely and unusual recovery shapes for unusual times.
Igor Popov, an economist shared “I think that it might be a short v followed by a longer slant, some people are calling this a square root recovery.” “I think we will see there is a lotof pent up demand for a lot of activities that people are unable to do while they are social distancing. But at the same time a lot of sectors will have structural changes that will just take some time.”
Regardless of whether we see a traditional recovery trajectory or one of these new shapes some are predicting, the key is all experts still agreed the economy will bounce back, and so will we.
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