July 20

7/20 – From Thursday’s “Supply Chain Chat”: The U.S. is entering what may be a prolonged recession. The unemployment rate jumped from 3.5% in February to 11.1% in June. The consensus forecast of economists surveyed by The Wall Street Journal is for GDP growth to contract by 5.9% in 2020. That’s 7 times the downturn we experienced during the financial crisis in 2008 (-0.8%). Surveyed economists are forecasting a GDP decline of 31.9% in Q2-2020, following a 5.0% drop in Q1. Economists said that recovery will depend on effective and sustained containment of Covid-19 – and that a virus resurgence would push consumers back into hibernation. A study by McKinsey & Co. said that, without a Covid resurgence, chain restaurant sales would get back to 2019 levels in 2021. With a resurgence, an industry recovery might take as long as 3-to-4 years.