Some of the top minds on Wall Street have predicted when states will reopen, when the economy will recover, and which businesses may never come back. These are their bleak forecasts.

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Several top analysts don’t expect the US economy to recover until the end of 2021.

REUTERS/Brian Snyder


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  • Top analysts from Deutsche Bank, Morgan Stanley, Jefferies, and Bank of America used global and national data to predict how the US economy would reopen and how long it would take to recover to pre-coronavirus levels.
  • Analysts at Morgan Stanley don’t expect all 50 US states to be fully reopened until at least June, and the country’s gross domestic product won’t reach pre-coronavirus levels until the end of 2021.
  • Even in a rebound, some said, the country is likely to experience double-digit unemployment and a declining retail sector.
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Though the coronavirus pandemic never prompted a true national lockdown in the US, roughly 95% of the country ultimately became subject to stay-at-home orders, businesses have shut down, and tens of millions of people have filed for unemployment. Now that the US epicenter, New York, has declared it’s “past the plateau” of new cases, some states have begun relaxing restrictions on leaving the house.

Soon after President Donald Trump issued guidelines in mid-April to reopen the US economy, governors in Georgia, South Carolina, and Florida began moving to reopen some nonessential businesses like gyms and barber shops as well as tourist attractions like beaches. Other state leaders have joined in reopening some parts of their economies, including Gov. Jared Polis of Colorado, who on Monday reopened real-estate showings and curbside delivery at retail stores.

But how long will it take for all 50 states to fully reopen, and how long after that will it take for the economy to recover?

Analysts from Deutsche Bank, Morgan Stanley, Jefferies, and Bank of America expect the US economy to undergo a slow recovery.

Some say US gross domestic product won’t rebound to pre-coronavirus levels until late 2021, with the unemployment rate in double digits for more than a year. But others stress that if scientists can develop a vaccine soon, the recovery may take less than two years.

Here’s what the banks have predicted, including which businesses may never come back and when an economic recovery might arrive.

Full reopening isn’t expected until June, at the earliest.

san francisco shelter in place coronavirus

San Francisco residents are allowed to go outside as long as they stay six feet apart.

Katie Canales/Business Insider


Jefferies estimates that rebuilding the economy will most likely take two years — and Morgan Stanley predicts that it will take until at least June for all 50 states to reopen, three months after the first state shutdowns.

Deutsche Bank projects reopening dates for all 50 states based on IHME research that pinpointed “the earliest point at which a state should be willing to open up, at least from a purely epidemiological perspective,” which is to say, different from the political perspective on which some states are deciding to reopen.

According to Deutsche Bank, some states, such as West Virginia, could theoretically begin rolling back containment measures in early May, while others such as Iowa would not meet the IHME criteria until late June. In actuality, Iowa didn’t issue a stay-at-home order, and it has already begun loosening the restrictions it has put in place.

The US may not get back to its pre-coronavirus level of economic output until the end of 2021.

yonkers er coronavirus

A respiratory specialist operates a ventilator for a patient with COVID-19 who went into cardiac arrest and was revived by staff, Monday, April 20, 2020, at St. Joseph’s Hospital in Yonkers, N.Y.

John Minchillo/AP


To model the economic impact of reopening, Morgan Stanley and Bank of America analyzed recent data out of China, which shut down far earlier than the US and has already reopened.

The results out of China were “unprecedented” and “even worse” than forecast, according to Bank of America, which served to increase its confidence in “very negative” forecasts for the rest of the world for April through June. For the period, it sees a US gross domestic product close to a third smaller (30%) and European output nearly cut in half (down 47.8%). Jefferies sees the US economy shrinking by about a third, and Morgan Stanley projects a 38% decline at the end of June from pre-coronavirus levels.

Morgan Stanley also sees US gross domestic product normalizing at the end of 2021.

The US is expected to reopen with double-digit unemployment.

The peak national unemployment rate during the Great Recession was 10%, half of what it is now.

The peak national unemployment rate during the Great Recession was 10%, half of what it is now.

David McNew/Getty Images


In just six weeks, more than 30 million Americans have filed for unemployment — and many of the lost jobs won’t return after the economy stabilizes, Jefferies predicts.

The US Congressional Budget Office doesn’t expect the country’s skyrocketing unemployment to slow anytime soon. Following the weeks of record jobless claims, the CBO predicts that the US unemployment rate will average 14% in the second quarter and 16% in the third quarter. For comparison’s sake, the unemployment rate in any one month during the Great Recession peaked at 10% in October 2009.

The CBO predicts that the economy will begin to rebound in 2021 but that unemployment will still hover at about 10% through the year and decline only as low as 9.5%. That would still be nearly three times what it was at the end of 2019.

Stores and restaurants may not bounce back for a while — if ever.

Monica Mileur packs grocery items into a box at Union Loafers restaurant Friday, April 10, 2020, in St. Louis. Some restaurants have turned to selling groceries and other provisions to customers as a way to help make up for revenue lost during the coronavirus outbreak. (AP Photo/Jeff Roberson)

Monica Mileur packs grocery items into a box at Union Loafers restaurant Friday, April 10, 2020, in St. Louis. Some restaurants have turned to selling groceries and other provisions to customers as a way to help make up for revenue lost during the coronavirus outbreak. (AP Photo/Jeff Roberson)

Associated Press


Reopening businesses is one thing, but getting people to leave their homes and spend money again is quite another.

Morgan Stanley found that China’s industrial and manufacturing sector bounced back to almost normal production quickly, though the retail and hospitality sectors still have a ways to go.

The firm observed that Chinese hotels were still at less than half of normal occupancy. Retail stores were getting just 70% of their pre-coronavirus foot traffic, and restaurants were at only 50% of prior occupancy.

In the US, Morgan Stanley found that restaurants had already experienced a “bottoming out” at a 40% year-over-year decline in March revenue, and it predicted that their recovery would most likely be “relatively gradual.”

Bank of America agreed, citing proprietary credit-card data indicating that US restaurant spending began falling significantly a few days before the first state-level lockdowns were issued. Many consumers will probably stay home even after the restaurants reopen, it added. The ratings agency Fitch expects the collapse in tourism, travel, and leisure activities to last through the summer before slowly resuming, with demand most likely remaining weak in the second half of the year.

Morgan Stanley also warned that US retail might never fully recover, as it sees consumers moving toward online sales for apparel, furniture, and general merchandise even after brick-and-mortar stores reopen. It said it was skeptical that the online-offline spending mix would “shift back to what it was in 2019.”

The forecasts don’t factor in a breakthrough drug or vaccine — or a second surge of infections.

masks american factory workers manufacturers ppe employment essential workers

Ellen Bennett, founder of Hedley & Bennett wears a mask on her factory floor Thursday, April 16, 2020, in Vernon, Calif. The Southern California company, which normally makes aprons and other workwear, has transitioned their efforts to making masks amid the COVID-19 pandemic.


AP Photo/Marcio Jose Sanchez



While the Deutsche Bank model suggests a slow recovery, the firm noted that a breakthrough vaccine would speed up economic growth. On the flip side, a significant rise of infections in the fall — as some have predicted — would result in continued unemployment and little economic growth.

What Deutsche Bank calls “a quicker normalization” would lead to the recovery of about 80% of lost employment by the end of 2020, with about half of that amount returning by July. But its slower-return model suggests a two-year period to bring a return for what it calls “high-contact occupations,” and even that model doesn’t bother to predict what would happen if a second surge in infections rivaled the first.

The bank acknowledged the uncertainty but said it “seems like a reasonable set of parameters to start from.” It also noted that the news and data flow as of late April had already made its faster-return model seem “somewhat too optimistic.”

Separate from Morgan Stanley’s economic forecasts for the next two years, the firm’s biotech researchers also projected a timeline of coronavirus outbreaks in the US from now until June 2021. The bank’s biotech researchers expect infections to slow over the summer thanks to state stay-at-home orders, but they warn that new outbreaks could arise in the winter. This is already happening in other countries, such as Singapore, which recently reported a spike in coronavirus cases after a month of stability.

Robert Redfield, the director of the Centers for Disease Control and Prevention, has also predicted that the US may face problems later in the year when the lingering coronavirus threat would coincide with flu season. “There’s a possibility that the assault of the virus on our nation next winter will actually be even more difficult than the one we just went through,” Redfield said in an interview with The Washington Post. “And when I’ve said this to others, they kind of put their head back; they don’t understand what I mean.”

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