July 2, 2020
The recession brought on by the outbreak of COVID-19 may have ended, but National Retail Federation chief economist Jack Kleinhenz says that a second wave of COVID-19 outbreaks are a “major threat” to continued recovery.
“While it would be unusual for a recession to last less than six months, it is possible,” said Kleinhenz. “The bad news is there is plenty of uncertainty on the shape of the reopening of the economy, and the recovery will be slow even if we are no longer in recessionary territory.”
While the U.S economy has trended upwards on metrics like consumer spending and retail sales, Kleinhenz warned that the recovery will still be dictated by the success of efforts to end the pandemic. A second wave of outbreaks in markets that have reopened like Florida, Georgia and Texas could greatly hamper recovery.
“These outbreaks are alarming, and if they accelerate will certainly sway consumer and business confidence, taking a toll on output and employment and prolonging the time it takes to achieve a true economic recovery,” he said.
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