This is an utterly unique “shock” recession. If it is brief, the recovery will be strong and swift.
What you're not hearing about the third wave of Covid-19 and the V-shaped recovery
Thursday, December 3, 2020
Despite cases six times greater than in March and April, the Covid-19 85/80 rule is keeping the economy on track for new-high GDP in Q1-2021.
Update to Strategic View
We're in a third wave of Covid-19, with cases six times greater than the first. But fatalities are lower. There is an 85/80 rule, under which 85% of the cases are younger people and 80% of the fatalities are older people. That liberates the majority of the population to go back to work and back to school, generally risking illness but not death. Our April forecast that GDP would re-attain its pre-recession peak by Q1-2021 is on track to be accomplished. High-frequency data shows no slackening of activity despite the third wave. There are winners and losers, as in any recession. If Q3 shows 11.1% growth as estimated by GDP Now, then Q1-2021 would only have to show growth of 3.8% SAAR. With a vaccine on the way and a record stock of personal savings, we think that's eminently attainable.