United States Chartbook - September 2020 | U.S.

The economic recovery is well underway, but its speed and durability are now in question. Fiscal aid is dwindling, flu season is fast approaching, and election uncertainty is rising. After a 10.2% peak-to-trough GDP contraction, we believe the economy will have recouped about two thirds of its output loss at the end of Q3.


What you will learn:

  • Labor market and consumer spending recoveries have varied across US regions. Perhaps most importantly, regions that
    suffered the most severe damage received the weakest boost from federal fiscal relief.
  • Layoffs are easing, but initial claims for jobless benefits are still well over 850,000 a week.
  • Business sentiment also signals further growth, but at a slower pace – especially in services.
  • Record low mortgage rates, tight inventory, and pandemic-induced demand will support housing activity.
  • The Fed will no longer see low unemployment as a reason to hike rates if inflation stays under the 2% target.
  • We had cautioned that markets were not fully pricing key risks, and we think numerous drivers point to recent volatility continuing in the build-up to the November elections.

Topics: United States, Business and economic outlook, Global trade, Fiscal stimulus, Consumer spending, monetary policy, Inflation, Labour markets, Federal Reserve, Dollar, Coronavirus, Housing Market

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