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Weekly Economic Monitor – Mid-2020, the Economic Impact of the Pandemic

By Scott J. Brown, Ph.D., Raymond James

Mid-2020, the Economic Impact of the Pandemic – Efforts to contain the coronavirus have had a major impact on the global economy. There is still a lot of uncertainty in the outlook, which has three elements. First, there was a sharp decline U.S. Gross Domestic Product in 2Q20. Second, there was a sharp-but-partial rebound off the lows in May. Third, improvement after the initial rebound will slow, barring a vaccine or effective treatment for COVID-19, leaving a long-lasting gap between the level of aggregate economic activity and the pre-pandemic trend. There are significant challenges in the second half of the year and the risks remain weighted predominately to the downside.

This Week – A lot of fresh economic data, with a focus on the employment report (on Thursday). Labor market figures are currently subject to a number of quirks beyond the usual seasonal adjustment and statistical issues. The BLS is reported to have worked harder to reduce the classification issue the led to an under-reporting of the unemployment rate over the last three months. Nonfarm payrolls should continue to reflect the initial rebound in economic activity. The ISM Non-Manufacturing Index should be less weak. FOMC minutes are unlikely to provide any new information, but there’s always a chance that some comment could be taken out of context.

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