Economy

JPMorgan becomes first major bank to say first quarter GDP will decline because of coronavirus surge

Volunteers from girls’s group Nuevo Amanecer Mujer Integral assist with the distribution of frozen turkeys and meals containers forward of Thanksgiving to households affected by the Covid-19 pandemic on November 18, 2020 in Los Angeles, California.

Frederic J. Brown | AFP | Getty Images



JP Morgan economists now see an financial contraction within the first quarter due to the spreading coronavirus and associated restrictions being imposed by states and cities.

The new forecast is a departure from Wall Street’s broadly held view that the first quarter could be constructive, with an bettering economic system all through 2021.

The JP Morgan economists stated they anticipate the economic system to develop briskly within the second and third quarter, based mostly on constructive vaccine trials.

The economists anticipate the first quarter to contract by 1% after progress of 2.8% within the fourth quarter. For the second quarter of 2021, they see the economic system rallying and progress of 4.5% adopted by a strong 6.5% within the third quarter.

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