JPMorgan becomes first major bank to say first-quarter GDP will decline because of Covid surge

     The JPMorgan economists become the first to disagree with Wall Street's forecast of 2021 Q1 showing positive economic growth and instead say that due to the recent surges in covid cases the first quarter of 2021 will be negative. They see the economic growth shrinking down by one percent in the first quarter and then rising to 4.5 in the second quarter and rising even more to 6.5 in the third quarter of 2021.This all being said JPMorgan economists still think that the year 2021 will be met with good expansion in the second and third quarters due to the hopeful development of a vaccine . Not only are they predicting that the positives of a vaccine will help the economy but more stimulus checks will help the economy to see increased growth in the second and third quarters as well.  In the end, the JPMorgan economists believe that this growth we were experiencing in the months after the shutdown was the economy opening up but now the majority of the economy is opened and running and now we are facing restrictions that will slowly close the newly opened economy, Sadly the side effects will be decreased growth from q4 of 2020 to q1of 2021. Hopefully, the positives of a vaccine and more financial help from the government will help the economy grow and move past the restrictions after they are implemented in 2021.

Do you think these factors will help the economy to see growth?

https://www.cnbc.com/2020/11/20/jp-morgan-says-first-quarter-gdp-will-decline-because-of-rising-covid-cases-and-restrictions.html

US economy to shrink as surging coronavirus infections foreshadow 'grim winter'

JPMorgan Chase & Co. expects that the U.S. economy will shrink in the first quarter as states push back coronavirus reopening due to the new a wave of Coivd-19 infections, as the daily new number of cases amount to more than 141,600 on Sunday, and there have been 12.3 million cases reported in The U.S. and nearly 257,000 deaths. A JPMorgan a team led by chief U.S. economist Michael Feroli said that “The holiday season, from Thanksgiving through New Year’s threatens a further increase in cases.”

Feroli mentioned “The new measures will cause the U.S. economy to shrink by 1% in the three months through March after growing 2.8% during the final quarter of 2020,” stating that a vaccine will “limit the damage.” However, the firm forecasts that the U.S. economy will grow at a seasonally modified annualized quarter-over-quarter rate of 4.5%, 6.5%, and 3.8% in the final three quarters of next year.

Feroli further added that “One thing that is unlikely to change between 2020 and 2021 is that the virus will continue to dominate the economic outlook.”

What do you guys think?

https://www.foxbusiness.com/markets/us-economy-shrink-coronavirus-infections-surge-jpmorgan

Expiring Stimulus Programs threaten US Economy

Several critical COVID-19 economic relief programs will expire at the end of the year, which could force millions off of unemployment insurance, push many small businesses to close permanently, and raise the specter of mass evictions. This could threaten the stability of the US economy as the country enters an uncertain 2021.

In March, during the early days of the coronavirus pandemic, the $2 trillion Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, quickly passed both houses of Congress with bipartisan support, providing a lifeline to recently laid-off employees and businesses that were forced to close due to COVID-related shutdowns.

However, this legislative comity quickly dissipated as the pandemic wore on. The $3 trillion Health and Economic Recovery Omnibus Emergency Solutions Act, or HEROES Act, which followed the CARES Act, passed in the US House of Representatives in May but was stymied in the Senate. While Democratic House Speaker Nancy Pelosi championed the bill, GOP Senate Majority Mitch McConnell deemed it too expensive.

Stimulus gridlock has largely ensued ever since, with Treasury Secretary Steven Mnuchin working with Pelosi and McConnell for months with little progress. Pelosi wants a $2.2 trillion stimulus package, while McConnell has sought a $500 billion plan, but the leaders have not hashed out a compromise. Nor have their staffs worked together to forge any consensus on a potential bill. On November 19, Mnuchin expressed his desire to have $580 billion in unspent stimulus funds redirected to small businesses and extend unemployment benefits. It is unclear if this will occur, however, as it requires Congressional approval.

Do you think President-Elect Biden will be able to get stimulus package approved through the Congress?

https://www.businessinsider.com/stimulus-programs-cares-act-economy-covid-19-pelosi-mcconnell-trump-2020-11