Business economists sketch a brighter outlook

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Over the past three months, the outlook for the US economy has improved in the eyes of business economists.

However, optimism is somewhat expressed by the resurgence of the coronavirus.

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A National Association for Business Economics survey released Monday reveals a “significant rollback in expectations of depths reached in almost all categories in April,” said Megan Greene, a senior fellow at Harvard who leads the NABE survey of conditions Business.

The results of the survey of 104 NABE members showed that growth expectations had improved significantly, with two-thirds predicting that the economy, as measured by gross domestic product, will grow between the second quarter of this year and the second quarter of next year.

This is a turnaround from three months ago, when 70% of them predicted the economy would contract in the next 12 months.

The economy entered recession in February, ending a record expansion of nearly 11 years. During the January-March quarter of this year, the government estimates that GDP declined at an annual rate of 5%.

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Markets could take a shock this week when the government releases its first GDP estimate for the April-June quarter.

The consensus predicts that he will report that the economy has contracted at an annual rate of more than 30 percent.

It would be, by far, the steepest economic contraction on record – more than triple the current worst quarterly decline in 1958.

The NABE survey is based on responses received from July 2 to 14, a time when coronavirus cases were starting to increase in many parts of the country after businesses reopened.

Since then, the impact of the pandemic has worsened significantly, with the number of reported cases rising sharply.

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Despite the rise in virus cases, the NABE survey found that business economists’ outlook for the next three months compared to the previous survey in April showed improvement in sales, profit margins, prices, employment and capital expenditure.

The survey found that one in three businesses had resumed normal operations, but almost as many respondents said they did not expect their operations to return to normal levels for more than six months.

A significant proportion of survey respondents said they believe the virus will lead to more flexible hiring and working conditions, with 80% indicating that they expect their business to continue to provide a certain level of remote work to employees even after the end of the crisis.

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The unemployment rate in the United States, which was at its 50-year low of 3.5% before the virus hit in March, climbed to 14.7% in April and has since fallen to 11.1% . The NABE survey found that 58% of those polled believe that even by June of next year, the unemployment rate will still be high between 6.1% and 8%.

A large majority (85 percent) said they believed their businesses could “stay afloat” for more than six months without federal help, compared to 74 percent who said so in April.

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Congress is engaged in difficult negotiations over a new rescue aid package. Republicans are proposing, among other things, to reduce a temporary federal unemployment benefit expiring from $ 600 per week to about 70 percent of a recipient’s pre-pandemic salary. Democrats have adopted a much broader aid package that would include an extension of the benefit of $ 600 per week.

The Associated Press contributed to this article.

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