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When Will The Economy Recover?

When is the economy going to recover? This is a question we gotten from the community several times. What’s going to happen to our economy here in San Diego County and more specifically, La Mesa and East San Diego County. As always, I like to look at what the experts are saying, especially about things like the GDP.

The economy is often measured on the GDP. GDP stands for Gross Domestic Product. It provides an economic snapshot of a country, and its used to estimate the size and growth rate of an economy. The results of the first quarter of 2020 have already come in, and the GDP was a negative 4.8 four point eight.

The four major financial institutions, Goldman Sachs, JP Morgan, Morgan Stanley and Wells Fargo, are all predicting the GDP is likely to be down for the 2nd quarter as well. However, 3 of those 4 predict that the GDP will go up as businesses continue to open and become more operational with less restrictions in the 3rd quarter. And ALL four of those financial institutions predict the fourth quarter will show positive economic recovery.

So, how do Economists analyze the recovery and make their predictions? In the past, economists would typically just looked at the Business Science of the economy, meaning…how has the economy rebounded from similar slowdowns in the past? However, with our current crisis, they also have to look at other Sciences, such as Health Science and People Science.

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Health science helps them look at the current health situation, and takes into account when will it be under control and whether it could possibly flareup again in the fall.

People’s Science, on the other hand, helps them to look at consumer patterns. Meaning, once businesses are operational, how long will it take the American Consumer to return to “Normal” consumption patterns? Such as eating out at restaurants, going to the movies, sporting events, or traveling.

Taking all of these factors into consideration makes it a bit more difficult to make projections about the economy and how it will recover, rather than in the past when they just looked at the Business Science.

One good thing is that most economists are NOT predicting an “L” shaped recovery, meaning the economy is not going to go down and stay down. Most are predicting the economy to recover in the shape of a “V” or Check mark shape which is a little longer recovery. In either case they are all predicting the economy to go up in the second half of this year.

Please feel free to reach out to us anytime here at One World Realty should you have questions or need advice about what to do in regards to buying or selling your East County home.

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