Economic Impact: In the U.S. and Around the World
Drag On Global Growth, Modest Impact in U.S.
The spread of the coronavirus is a drag on global growth, which includes the United States. Growth in the United States will likely drop in the first quarter by 0.1% to 0.3%. Under this scenario, growth could fall under 2% in the first quarter.
China to Likely See Growth Fall Between 2% and 6%
Right now, some forecasters are predicting growth in China to fall from between 5% and 6% to between 2% and 3% in the first quarter, but that number could be substantially lower. Growth should rebound somewhat in the second quarter if the outbreak is contained soon, workers return to work, and factories resume production at meaningful levels.
The continuing spread of the virus in Japan, Korea, Italy, and other markets is generating additional demand shocks and supply chain disruptions, with corresponding downside risk for U.S. and global growth. Some forecasters are warning of steep declines in U.S. corporate profits for 2020.
Rebound Likely Once Virus Is Contained
When the virus is contained, there will be a bounce back in growth in China and elsewhere that makes up for lost output. The longer the spread continues, the longer it will take to see that rebound.
New Survey on Business Impact
A new flash survey released by our partners at the American Chamber of Commerce in China reveals an early look at how the outbreak is affecting U.S. businesses with operations in China. Among the key findings were widespread reports of travel delays and productivity declines. Nearly one-third of respondents say they are facing increased costs and significantly reduced revenue. Click here for the full results.
House leadership was able to resolve the standoff with Rep Gohmert (R-TX) and pass by unanimous consent an amended 2nd COVID-19 epidemic economic stimulus package (H.R. 6201). A fact sheet from the House Education and Labor Committee on the paid sick leave and family leave language in HR 6201 is attached. The Joint Committee on Taxation explanation of HR 6201 can be seen here.