Survey: Economists see full recovery by late 2021

NEW YORK — The U.S. economy’s growth is likely slowing as 2020 comes to a close, but a growing number of economists expect it to claw back to its pre-pandemic strength by the second half of next year as vaccines for the coronavirus become widely distributed.

That’s the view from the latest survey of the National Association for Business Economics. It found that 73% of surveyed forecasters say the economy will return to its prepandemic level by late 2021. That reflects greater optimism than the forecasters had expressed a couple months ago, when just 38% of them said they thought a full recovery could occur before 2022.

Economists have been saying for months that only when vaccines are widely available to control or defeat the virus will the economy be able to sustain any meaningful recovery from the worst economic downturn since the Great Depression of the 1930s.

Hopes that one or more coronavirus vaccines will roll out soon are helping drive expectations higher, said the survey’s chair, Holly Wade.

“NABE panelists have become more optimistic, on balance,” Wade said, “with nearly one-third revising their outlook higher based on recent news of effective vaccines.”

Pharmaceutical companies are asking U.S. regulators to allow the use of their vaccine candidates after reporting encouraging data from clinical trials. The hope is that a wide rollout would mean fewer restrictions on businesses next year and more confidence among shoppers and companies to spend more.

In the meantime, the economy is struggling to gain traction. Measures of consumer confidence remain well below their pre-pandemic levels.

On Friday, the government reported that employers sharply scaled back their hiring in November, adding 245,000 jobs — the fewest since April and the fifth consecutive monthly slowdown. The report provided the latest evidence that the job market and economy are faltering in the face of a virus that has been shattering daily records for confirmed infections.

In the near term, economic activity is likely to slow further, with health officials warning against all but essential travel and states and cities limiting gatherings.

But if the NABE’s forecasts are right, a full recovery could be reached by late next year. If so, it would mark a quick rebound for the economy after its breathtaking plummet during the spring. When governors around the country ordered businesses to shut down, the U.S. economy shrank by 31.4% from April through June.

During the summer, as stay-athome orders were relaxed, the economy grew at an annualized rate of 33.1%. Now that the easiest gains have been made, the economists surveyed by NABE say the economy likely has been growing at an annualized rate of 4.1% during the last three months of 2020. They expect growth to further slow to 2.9% during the first three months of 2021.

The NABE survey covers a panel of 48 professional forecasters.