Nation's Largest Bank Predicts A U.S. Recession By July

The chart above shows U.S. recessions since 1948. The last (and deepest) recession was the 2007-08 recession at the end of the Bush administration. The United States has not had a recession since then, and that marks the longest time without at least a minor recession.

Because of that length of time without a recession, and some economic indicators (such as the inversion yield of Treasury bonds), many economists thought the U.S. was heading for a recession. Other economists disagreed.

But that was before the Coronavirus hit. That virus has caused a significant disruption of the U.S. economy. Now, economists at the country's largest bank (JP Morgan - Chase Bank) are predicting the U.S. will be in recession by July.

Here is how Ben Winck reports this in the Business Insider:

The US's biggest bank expects the coronavirus pandemic to sink the US and European economies into a deep recession as soon as this summer.

JPMorgan's views of the virus "have evolved dramatically in recent weeks" as the outbreak has spread further around the world and fueled the worst stock-market sell-offs in decades, the bank's economists wrote in a Thursday note.

The US economy could shrink by 2% in the first quarter and 3% in the second, JPMorgan projected, while the eurozone economy could contract by 1.8% and 3.3% in the same periods.

A technical recession is defined as two consecutive quarters of negative gross-domestic-product growth. The bank's emerging-markets economists haven't updated their growth estimates, but "evolving news on the virus and the material tightening" in those markets' financial conditions make it "reasonable to expect further downward revisions" in global first-half GDP, the economists wrote.

The outbreak was initially deemed a short-lived but disruptive shock to world economies, but two key developments led the bank to brace for a "much sharper" contraction in the first half of the year and a "novel-global recession."

The economists first cited the "sudden stop" to economic activity created by quarantines and social-distancing measures around the world. Italy, where the number of cases has surpassed 15,000, is in lockdown, and numerous countries, including the US, have banned some travel to curb contagion. The cancellations of major sporting, cultural, and business events will further cut into consumer spending, and the uncertainty surrounding the virus will make a coordinated economic restart even more difficult, the economists said.