Economists have not changed much about the best and worst-case scenarios of economic recovery


After the employment report in August, Achieved better than expected results For American workers, economists are far more optimistic about the outlook for unemployment at the end of this year.But this optimism has not penetrated into their other economic forecasts-partly because there is still a lot of uncertainty about what the rest of the year will bring, and partly because The weekly payment of $600 will be due on July 31st Because unemployed workers may have plunged millions of Americans into terrible economic trouble.

inside The latest version of our Economic survey, versus Global Market Initiative At the University of Chicago Booth School of Business, FiveThirtyEight asked 28 quantitative macroeconomic economists about the future of US GDP and unemployment figures. We also asked them about American spending and saving habits. Economists believe that these habits changed in August (and did not get better).

The recent employment report seems to make the experts a lot of Be more optimistic about how quickly Americans can return to work.just Two weeks ago, Our survey team believes that there is only 29% chance that the unemployment rate will fall below 10% in the third quarter of 2020. But not only did it exceed the 10% threshold, it also fell to 8.4% in the Labour Office statistics.’ The latest data. (Yes, there is Some excusable circumstances For this reason, they did not ignore the fact that employment recovery is much faster than economists predicted. ) This led our team to significantly lower their estimates of the unemployment rate for September and December 2020:

Unemployment rate improved faster than expected

According to the FiveThirtyEight/IGM Economic Survey, the forecasted unemployment rate for September and December 2020

September 2020 The prediction comes from…
category August 10 September 8
Lower bound (10th percentile) 8.4% 7.1%
Median (50th percentile) 10.0 8.1
Upper limit (90th percentile) 12.0 9.3
December 2020 The prediction comes from…
category August 10 September 8
Lower bound (10th percentile) 7.7% 6.2%
Median (50th percentile) 9.6 7.6
Upper limit (90th percentile) 12.7 9.6

Forecasts were made on August 10 and September 8.

Source: FivethIRTYEIGHT/IGM COVID-19 Economic Survey

“Our survey believes that the surprisingly large drop in the unemployment rate last month was not temporary, but reflected a more permanent decline,” Alan Timmerman, An economist at the University of California, San Diego, who has been consulting the FiveThirtyEight survey.

For example, the survey team’s estimated unemployment rate for December is now 2 percentage points lower than when we asked it a month ago. Our panel of experts currently believes that there is a 63% chance that the unemployment rate will fall below 8% between now and the end of the year.

Last week’s employment report Not the first It turns out that this is much better than most observers expected. (It turns out that predicting economic recovery during a pandemic is difficult.) Unraveling unemployment indicators is particularly challenging because they point in many different directions—for example, even if the unemployment rate is falling, state unemployment claims Still at a historical high.

Jonathan WrightEconomists at Johns Hopkins University have been negotiating with FiveThirtyEight about the survey, and he said that the household survey that forms the basis of the unemployment rate may not be able to tell the full story.The survey has a A fairly strict definition of unemployment -It does not include people who may be unemployed or lose income, such as part-time workers or people who are not actively looking for work due to the pandemic. “The broader concept of underemployment is still painting a pretty bad picture,” Wright said.

Economists also believe that racial inequality in unemployment– Big problem In the August employment report-it will not be much better by the end of the year. The survey team predicted that the median unemployment rate for black workers in December was 11.9%, and there is at least a 90% chance that the unemployment rate for this group will reach double digits by the end of the year. Although the forecast for Hispanic workers is slightly better (9.3%), it is expected that by December, both black and Hispanic workers will have much higher unemployment rates than white workers.Very convincing is the panel Best case Hispanic worker unemployment rate forecast (7.8%) is only slightly higher than Worst case White workers (7.9%), which in turn is more promising than white workers Best case Black workers (10.1%).

Racial inequality in unemployment may persist

According to the FiveThirtyEight/IGM Economic Survey, the actual unemployment rate in August 2020 and the predicted unemployment rate of U.S. workers in December 2020 by race

Unemployment rate in December 2020*
Worker race Unemployment rate in August 2020 Best case median Worst case
White 7.3% 5.4% 6.4% 7.9%
Hispanic 10.5 7.8 9.3 11.3
Black 13.0 10.1 11.9 14.0

*The prediction confidence interval from the survey team. The best and worst-case scenarios refer to the 90th and 10th percentile predictions of the expert group, respectively.

Source: FivethIRTYEIGHT/IGM COVID-19 Economic Survey

It is also worth noting that economists’ optimism about the overall economy has not really increased—on the contrary, there is still huge uncertainty about what will happen to economic growth for the rest of the year. In our survey, the gap between the best and worst-case scenarios of actual GDP growth in December was 12.7 percentage points, which is basically the same uncertainty as the estimate at the beginning of July. Although our survey’s forecast for the December unemployment rate has been lowered, economists’ outlook for real GDP growth in the fourth quarter (a broader measure of overall recovery) has hardly changed in the past two weeks. The group now believes that the annualized growth rate of real GDP by the end of the year will reach 6.3% (month-on-month), which is only higher than 5.8% August 24.

Although this ratio has been higher than any median forecast in our survey since we started asking this question on June 8, economists still believe that there is at least a 10% chance of real GDP growth in the fourth quarter—they The best-case forecast has been maintained at a growth rate of between 12% and 13% for a month.

Another sign of the continued pessimism of economists: They believe that August spending and savings data will not be so optimistic.Although more Americans will return to work in August, economists collectively believe that a 31% probability Actual personal consumption expenditure Compared with July, August dropped sharply, and there is a 51% chance Personal savings rate Compared with July, August dropped significantly.Some economists seem to associate their forecasts of these two indicators with the due time of the unemployed worker’s $600 weekly payment, which makes sense because the payment Seems to allow many people The unemployed spend more money than usual and even save some money.

A slowdown in consumer spending — or a decline in the savings rate, which may be a sign that families tighten their belts in the future — is not good news for the economy, because if their customers are their customers, companies may find it harder to bring back more. The workers suddenly started to spend less.

All of this shows that now is a critical time for the economy, but it is also confusing. Things are certainly not as bad as the economists in our survey thought a few months ago. But this is all a matter of opinion. after all, More than half of the jobs lost March and April haven’t come back yet. Since millions of people are still unemployed and there is huge uncertainty about the trajectory of the virus, it is easy to understand why economists have not celebrated.



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