I warned this would be coming. I started saying in 2018 that there would be about five years until a major recession hits the country because the economy was very weak and the fundamentals were crumbling because they never healed from 2007. I said it would be awful, and far worse than before.
Almost nobody could have said it was a virus that would trigger it, but the fact is that regardless of the trigger, the result would be the same- mass job loss, misery, poverty, and more. It is the same with many things in life- the way to the destination may be different, but the end is the exact same destination.
A statement from Bank of America seems to have made this official, that the country is in a recession, and jobs will be destroyed in mass and wealth will also be destroyed for many.
Bank of America warned investors on Thursday that a coronavirus-induced recession is no longer avoidable — it’s already here.
“We are officially declaring that the economy has fallen into a recession … joining the rest of the world, and it is a deep plunge,” Bank of America U.S. economist Michelle Meyer wrote in a note. “Jobs will be lost, wealth will be destroyed and confidence depressed.”
The firm expects the economy to “collapse” in the second quarter, shrinking by 12%. GDP for the full year will contract by 0.8%, it said.
Bank of America looked at the labor market as a way to understand the “magnitude of the economic shock.” The firm expects the unemployment rate to nearly double, with roughly 1 million jobs lost each month of the second quarter for a total of 3.5 million.
The coronavirus outbreak has already sent global markets into a tailspin as travel comes to a near standstill and businesses shut their doors. The S&P 500 and Dow Jones Industrial Average are trading in bear market territory, and now sit around 30% below their all-time high levels from just last month. (source)
Winter is upon the country, but there is still time.
It’s not the time to stop.
It is time to get to work.