As Arizona starts to work through the health crisis that plagues this country in 2020, more and more conversations are turning to economic recovery. While we look for signals that Arizona has reached a plateau in cases of COVID-19, the concern and anxiety of what will happen as businesses open up again is on all of our minds. This causes confusion about what an economic recovery will look like in 2020. With all of this in mind, it’s important to understand what economists are using, three types of sciences to formulate their forecasts and to work toward clearer answers.
- Business Science – How has the economy rebounded from similar slowdowns in prior economic downturns?
- Health Science – When will COVID-19 be under control in Arizona? Will there be a 2nd flareup of the virus later this year?
- People Science – After businesses are fully operational, how long will it take American consumers to return to normal consumption patterns? (Ex: going to the movies, attending a baseball, and football events, or traveling on a plane).
Sam Khater, Chief Economist at Freddie Mac, said:
Although the uncertainty of the crisis means forecasts of economic activity are more unclear than usual, we expect that most of the economic damage from the virus will be contained to the first half of the year. Going forward, we should see a recovery starting in the second half of 2020."
Early May, the Bureau of Economic Analysis released the advanced estimate for Gross Domestic Product (GDP) for the first quarter of 2020. The GDP estimate came in at -4.8%. It was a clear indicator showing how the U.S. economy slowed as businesses shut down and consumers were mandated to stay, home stay healthy, in fear of the health crisis and of contracting COVID-19.
Salons and Barbershops can re-open Friday May 8th 2020.
Restaurants can open Monday May 11 2020. With safe distancing and practicing CDC recommendations.
While April rent payments turned out better than expected, landlords and tenants are confused about how and what they are going to do to get rent paid on time. Some cities in other states are seeing rent strikes. Maybe another stimulus check is expected?
Many Experts agree that the second quarter of 2020 will be an even greater slowdown, a sign more businesses are feeling the effects of this health crisis. The same experts, however, project businesses will rebound, and an Arizona recovery will start to happen in the second half of 2020.
As time goes on in 2020, we’ll have more clarity around what the true economic recovery will look like in Surprise Arizona, and we’ll have more information on the sciences that will affect it. As the nation’s economy comes back to life and businesses embrace new waves of innovation to serve their customers, the Arizona spirit of grit, growth, and prosperity will be alive and well.