As the coronavirus spreads and raises the risk of recession, some analysts are further downgrading their forecasts for the U.S. economy.
The outbreak is taking a growing toll on the U.S. economy, chiefly through reduced travel and tourism, Zandi says. Also, manufacturers will likely export less to Asia and Europe as demand there slackens. And lower imports from those regions are expected to lead to shortages of intermediate parts and retail products in the U.S., along with higher prices that curb consumer spending.
For all of 2020, Zandi predicts the virus will trim growth by two-tenths of a percentage point to 1.7%. But if the outbreak becomes a global pandemic – a risk Zandi now puts at 40%, up from 20% – that almost certainly would result in a U.S. and global recession, he says.“It’s becoming a threat to the economic expansion that is rising,” he says. The U.S. economy has grown for a record 10½ years.
“It’s causing an economic pandemic,” she says. “We have a global reaction that’s literally shutting down businesses.”
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