Chris Kuehl, who spoke earlier this year at BIFMA's 360° conference, told a virtual crowd of more than 230 gathered on a recent call, the recovery still depends on timing, but most economists expect a May reboot.
The U.S. economy is likely going through a “short, sharp” recession because of the COVID-19 shutdowns but should regain its footing in late summer or early fall as the country slowly puts itself back into motion, according to an economist who spoke to the industry during a webinar hosted by BIFMA.
“Most economists are still thinking that we're looking at either a V or a U (shaped recession), so we're down to our low levels right about now, and then we'll start to come back up in May,” he said. “By the end of May, early June, we would be substantially back to where we were when all of this started.”
Kuehl called the virus a black swan event — an odd situation because the whole recession is odd. It is a lockdown-imposed, mandated recession. “There's nothing natural about it,” he said. “It didn't grow out of any traditional things that trigger a recession. So of that 31 million (workers who filed for unemployment), roughly 80% to 85% of them would be considered furloughed rather than actually laid off.
“By the time we get to August, September, we are going to be on your way to recovery, and then you have the end of the year, which will continue that recovery, which is playing itself out with the public as well.”
Kuehl said the vast majority of people believe this is going to be a short, sharp recession, and there's not a whole lot of abject depression out there. No one is expecting an L-shaped recession, where the economy goes down and stays down, similar to what happened in 2008 when we recovered very slowly, and then it took almost 10 years to get back to where we had been.
Just what the long term effects on the office are remains to be seen. Are we seeing the long-awaited shift away from office work to remote work? Though hundreds of thousands of workers have shifted to work from home, Kuehl doesn't believe the move will be permanent.
“Early on, the polls insisted that people were wildly enthusiastic about working from home,” he said. “It just sounded like such a great deal. They get to hang out in their own house and not have to get ready for work, et cetera. Now that we've been doing it for a month, it is completely turned. Now people are saying, 'I hate this. I am tired of my kids, I am tired of my pets. I am tired of my spouse. I am tired of my neighborhood. I miss my work friends, I miss Starbucks, I've got to get out of here.' And it's also been determined that companies are struggling to (help) people remotely. It's one thing to talk about management by objective, give somebody something to do, then to actually do it.”