The outlook for the economy and the outlook for COVID-19 are fusing. As long as the virus is spreading, the recovery will be incomplete and uneven. Many sectors, like restaurants, airlines and sports leagues, will remain disrupted until the virus is in the past. Those parts of the economy that have reopened are functioning at the mercy of public health policy, disrupted value chains and consumers’ willingness to leave their homes.

But an uneven recovery is still a recovery. The second quarter brought us economic readings that broke records for the speed and severity of their declines, but that is in the past. Even a limited return to normal activity will bring high growth readings in the near term: quarter-over-quarter growth is poised to show significant improvement from a depressed base. However, a full recovery will take time.

Key Economic Indicators

USEO - August 2020 - Chart 1