The Strategist

JP Morgan: US economy will start 2021 with a decline

11/23/2020 - 02:37

Analysts at JP Morgan Chase believe that the US GDP will show a decline in the first quarter of 2021. CNBC notes that JP Morgan was the first major bank to declare that the U.S. economy will start with a decline in 2021.

Analysts see the reason for this trend in the negative consequences of the second wave of the coronavirus, the new restrictions it has caused and the fact that mass production of COVID-19 vaccine will take some time. 

In the fourth quarter of this year, according to the bank's analysts, the US GDP will grow by 2.8% thanks to the pace set as early as the third quarter of this year; in the first quarter of 2021, JP Morgan's analysts expect a 1% decline.

A recovery of 4.5% is expected in the second quarter, which will continue in the third quarter with a growth of 6.5%. In addition, bank analysts expect the U.S. government to provide new stimulus measures by $1 trillion closer to the end of the first quarter, which should help the economy in the middle of next year.

The only thing that remains unchanged when comparing 2020 and 2021 is that the virus continues to dominate economic forecasts," says JP Morgan, "because the number of detected cases of infection in the current wave is significantly higher than in March and July".