NAHBNow.com
NAHB Chief Economist Robert Dietz provides the following analysis on the impact of the coronavirus outbreak:
It has been a dramatic week given ongoing aggressive government action to slow the spread of the coronavirus. While concern is still growing about the current environment, it is important to keep in mind that the crisis will eventually end, and with that conclusion, economic healing will progress.
NAHB has made significant forecast revisions given the growing “pause” of the U.S. economy. We are assuming an approximate eight-week mitigation period, followed by a decline in the growth rate of virus cases. This will enable portions of the U.S. economy to return to at least partial activity, slowing job losses and bringing some workers back to work. We estimate that approximately 40% of GDP is on pause or partial pause (keep in mind that about one-third of the economy is housing and healthcare alone), however this share has been growing as companies pause operations.
For the second quarter, we are forecasting a minus 11% GDP growth rate, which would be the largest decline in decades for a single-quarter. The unemployment rate is expected to rise to close to 7%, with the March and April job reports showing millions of layoffs. The third quarter is likely to post a negative growth rate as well, due to economic damage in the spring.
