The steady recovery in many economic indicators in Q3 2020 has begun to wane as the US approaches winter. A resurgence in COVID-19 cases and softer demand will likely limit growth in the short-term. However, with two potential vaccines on the horizon consumers are likely to begin spending again in Q2 2020. Our base case forecast yields an annual GDP contraction of 3.6 percent in 2020, but an expansion of 3.4 percent in 2021. However, we can envision two additional scenarios ahead:
- an upside scenario in which growth momentum picks up again sooner and
- a downside “double dip” scenario that extends economic weakness deeper into 2021.