JPMorgan economists said Friday that they expect the economy to contract slightly in the first quarter of next year.
While most economists have been projecting growth throughout the year in 2021, JPMorgan economists now expect a one percent decline in the first quarter. The economy will then pick up steam, expanding at a 4.5 percent annualized rate in the second quarter, 6.5 percent in the third quarter, and 3.8 in the fourth quarter, the economists forecast. For the full year, they project robust growth of 3.4 percent.
“This winter will be grim, and we believe the economy will contract again in 1Q,” the economists wrote.
The coronavirus pandemic and government response will continue to dominate the economy, in their view.
“By a wide margin, the course of the virus has been the most important factor shaping the outlook,” the bank’s economists wrote.
The economy “now faces the headwind of increasing