The largest US bank JPMorgan Chase changed its forecast to the second quarter of this year. It now assumes that the US gross domestic product will fall by 40%. Originally JPMorgan Chase expected a drop of only 25%. Such a collapse would have been historically unique. It seems we have an interesting year ahead.
Why JPMorgan expects a drop?
The largest US bank also talks about unemployment. It should get to 20%. Over 25 million people would suddenly find themselves out of work.
Nevertheless, economists placed great emphasis on ensuring that all forecasts were taken with caution. They have made theirs worse because the link between the global economy has been broken. Less work, less shopping and no travel at all. This affects all sectors of the US economy.
The JPMorgan report directly states:
For the past few weeks, our predictions have been moving in the fog. The economic models that emerged in a time of peace and prosperity come to clear limitations. We have to look at the problem from a completely different perspective.
However, the report ends with a positive long-term prediction. The economy will start up in the third quarter and take some of its losses back. It should grow by 13 to 23%.