In an earlier post we discussed how most projections from financial institutions are calling for a quick V-shaped recovery from this economic downturn, and there’s research on previous post-pandemic recoveries to support that expectation.
In addition, we noted how there are some in the business community who believe we may instead be headed for a U-shaped recovery, where the return to previous levels of economic success won’t occur until the middle of next year. Yesterday, Reuters released a poll of U.S. and European economists which revealed that most surveyed are now leaning more toward a U-shaped recovery.
Here are the results of that poll:
Why the disparity in thinking among different groups of economic experts?
The current situation makes it extremely difficult to project the future of the economy. Analysts normally look at economic data and compare it to previous slowdowns to create their projections. This situation, however, is anything but normal.
Today, analysts must incorporate data from three different sciences into their recovery equation:
1. Business Science – How has the economy rebounded from similar slowdowns in the past?
2. Health Science – When will COVID-19 be under control? Will there be another flareup of the virus this fall?
3. Social Science – After businesses are fully operational, how long will it take American consumers to return to normal consumption patterns? (Ex: going to the movies, attending a sporting event, or flying).
The challenge of accurately combining the three sciences into a single projection has created uncertainty, and it has led to a wide range of opinions on the timing of the recovery.
Right now, the vast majority of economists and analysts believe a full recovery will take anywhere from 6-18 months. No one truly knows the exact timetable, but it will be coming.
Moving Forward Together
We’re in uncharted territory with Covid-19. The medical facts about the virus change daily. Meanwhile, the media generates a constant stream of fear inducing headlines. This combination can be overwhelming. To stay grounded during these uncertain times, it serves us well to recall a line delivered by F.D.R during his inauguration speech in 1933 – “the only thing we have to fear is fear itself.” This phrase, at the height of the great depression, gave people hope and a new way to look at a world wide depression that had been going on for three years. Ultimately, this phrase served as one of the pillars that led to the rebuilding of the economy.
Our mission is to provide you with accurate timely information about the real estate market. We follow the best minds in the real estate and share that information with you as it becomes available. Armed with actionable information, you can set aside fear and actively plan for your future. To that end, we’re here for you. Let’s get together for an online meeting to review the market and how it relates to your situation. To be clear this isn’t a sales call — this is one of the ways that our team gives back in these challenging times. To schedule a chat, click the Let’s Talk link and schedule a time that works for you: Let’s Talk.
Like you, we’re counting the days till life returns to normal and we can once again go to Powell’s Books, our favorite restaurants, the beach, the mountains, and all the activities that make Portland an incredible place to live. In the meantime, we’re here for you … stay safe out there … James Bradley