Key Highlights
- After record -32.9% GDP nose-dive in Q2, nearly 80% of economists see chance for double-dip recession, according to National Association for Business Economics
- Some 40% of economists see Congressional response to COVID-19 as “insufficient” and 37% see it as “adequate”
In the opinion of 235 members of the National Association for Business Economics (NABE) during late July and early August, approximately 80% of the members said the chances of seeing a double-dip recession are more than one-in-four.
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Several key elements were instrumental in the thinking of NABE members concerning a double-dip recession scenario:
- GDP’s -32.9% nose-dive in Q2
- Slow, incremental rising of unemployment rates
- Lack of a unified response on relief aid by both houses of Congress
- Ongoing concerns about ongoing spread of COVID-19
Some 40% of the NABE economist members rated the Congressional response to relief aid for those negatively impacted by COVID-19 as “insufficient.” 37% of respondents said the Congressional response was “adequate.”
“The panel is split in its view on Congress’s fiscal response to the recession,” said NABW President Constance Hunter, the chief economist with KPMG. “Nearly three out of four panelists believe the optimal size for the next fiscal package to be $1T or greater, compared to 17% who favor a smaller package.”
Similarly, approximately 45% of the NABE members believe the nation’s fiscal policy is “too restrictive” and 37% believe it is “about right.” More than 75% of the NABE support the Federal Reserve’s monetary policy, the highest approval level from this association since 2007.
In terms of the record level of federal debt, now $23.2T, more than half of the economists said they believe that budget deficits ought not be a concern during a recession. 13% of NABE members were worried about debt in a low interest-rate environment.
Lastly, some 60% of the member economists expect the Federal Reserve to keep interest rates at near zero through 2021 and that the central bank’s benchmark rate to be within 100 basis points higher by the end of 2022.
Thanks to the National Association of Business Economics and HousingWire.
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