When is the economy going to recover? What’s going on with the real estate market? These are all the questions that I keep getting from the Tulsa community.
What’s going to happen to our economy here in the Tulsa-Metro area? And while I could give you my opinion on these topics, instead of giving my opinion, I would like to look at the experts. This blog post along with my recent YouTube video will detail what the experts are saying about similar events in history and what the numbers tell us about the economy.
So, let’s go ahead and dive into what the experts are predicting.
The National Bureau of Economic Research announced that the U.S. economy is officially in a recession. Now, this did not come to a surprise to many as we are currently in a worldwide pandemic that subsequently shut down the country earlier this year which caused a significant decline in economic activity. Then not surprising, headlines announcing the country’s in a recession will cause consumers to remember the devastating impact the last recession had on our housing market just over a decade ago.
According to the latest Wall Street Journal economic forecasting survey, which polls more than 60 economists on a monthly basis, 85.3% economists believe a recovery will happen in the second half of 2020. So there seems to be a growing consensus among the experts that the second half of the year will be the start of the turn around in the United States.
We fully expect the economy could begin to pick up in late June and July with a strong recovery in the fourth quarter.Chris Hyzy
Chief Investment Officer for Merrill Lynch
In addition, five of the mayor financial institutions are also forecasting positive GDP in the second half of the year. Today four of the five expect a recovery in the third quarter of 2020 and all five agree that a recovery should start by the fourth quarter.
Now we need to think about how economists analyze the recovery and what they compare it to in order to make predictions. In the past, typically economists would look at the business science of the economy, meaning they were viewing how the economy has rebounded from similar slowdowns in the past to make accurate predictions. However now due to the current condition of the United States, they also have to look at other sciences to base their predictions off. One of the sciences that economists are looking into is Health Science.
Economists need to consider the current economic situation that we are in, when it will be under control, and the possibility of a flare-up in the fall. Economists are also looking into People Science. This means that they are measuring how long it will be once businesses are operational for the American consumer to return to normal consumption patterns such as eating out at restaurants, going to movies, attending sporting events, or traveling.
So taking all of these factors into account, economists are making projections about how the economy will recover and with the current economic climate, it makes it harder for them to make predictions compared to previous seasons. Unlike previous years, economists can’t just look only at business science but instead have to approach it holistically.
One thing that is positive, is that none of the four major institutions are calling for an L recovery. This indicates that the economy is not heading downwards and predicts that the economy will start to recover in the second half of the year as businesses open back up in a V-shaped recovery.
So the bottom line
Although the economy has gone down drastically, experts are predicting that the economy will go up in the second half of the year. Yes, we’re facing challenges at the moment but the future indicates an upward economic projection.
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