The economy in the United States will tumble in the first quarter of 2021 due to a surge in COVID-19, as states are currently preparing for another phase of lockdowns and restrictions, according to a JPMorgan analysis, The Hill reported.
''This winter will be grim, and we believe the economy will contract again in 1Q, albeit at 'only' a 1.0% annualized rate,'' said economist Michael Feroli, who led the forecast.
Coronavirus cases have climbed to a record amount over 160,000 a day, which have exceeded previous record highs set in March and April.
And Congress is still moving sluggishly toward hammering out a deal to help stave off an economic crisis. Experts think lawmakers will eventually reach a deal worth $1 trillion in the first quarter of 2021.
The JPMorgan report does project an economic rebound that will lift annual growth in the third quarter of next year by 6.5%, along with full-year growth of 3.4%.
''By a wide margin, the course of the virus has been the most important factor shaping the outlook. But fiscal policy has been firmly in second place,'' the report noted.
''Alas, some lasting damage still seems inevitable,'' the analysis said.
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