Top economist Ed Hyman sees zero US growth next two quarters


Ed Hyman, a broadly followed economist on Wall Road, said the coronavirus outbreak could close up causing a economic downturn in the U.S. and slashed his U.S. GDP forecast to zero growth in the next and 3rd quarters of this year

“Far more conditions are demonstrating up in the U.S. and feel very likely to be just the begin,” Hyman said in his take note titled, “U.S. Virus ‘Recession'” on Sunday. “Scope, severity, and duration are unsure. How significantly it adjustments habits in the U.S. is unsure.”

A tumble in GDP in two consecutive quarters generally defines a recession. The U.S. economic climate grew 2.1% in the fourth quarter final year and 2.3% for the complete calendar year 2019.

Hyman has been ranked the top economist in Institutional Investor’s yearly poll for additional than 3 a long time. His phone is a person of the most pessimistic on Wall Avenue as lots of only see a short term slowdown.

The stock market suffered a historic pullback last week as the speedy-spreading coronavirus stoked fears of a extended worldwide economic slowdown and drove investors out of possibility assets. The Dow Jones Industrial Average and S&P 500 experienced their worst weekly overall performance considering the fact that the financial crisis.

“Markets past 7 days gave rather adverse indicators such as the S&P, bond yields, oil, and credit history spreads,” explained Hyman.

The U.S. has verified 25 situations of the coronavirus infection as of Sunday. The virus is swiftly spreading exterior China in South Korea, Italy, Japan, the U.K. and Middle East.

In his bold call, Hyman also pointed to China’s document minimal manufacturing activity. China’s formal Acquiring Managers’ Index (PMI) tumbled to an all-time small of 35.7 in February from 50. in January. Hyman earlier reported he sees no financial expansion in China in the 1st quarter due to the deadly virus.

“All this is fairly uncertain, and we could be overreacting,” Hyman mentioned. “But we also really don’t want to underreact. In any event, all this produces more uncertainty for election outlooks.”

Hyman expects GDP to rebound to 2% in the fourth quarter and 3% in 2021, assuming the virus commences to clear.

Goldman Sachs also lower its economic forecast due to the outbreak, viewing a 1.2% GDP advancement in the very first quarter.

– CNBC’s Michael Bloom contributed reporting.

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