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8.A. - Page 27 of 104 2. Economic Overview National Outlook The majority of forecasters for the U.S. economy anticipate an extremely sluggish recovery over the next two to five years. • Unemployment recovery has slowed and is anticipated to worsen as some temporary job losses become permanent with the pandemic wearing on and more businesses likely to close. • Consumer confidence remains below pre -crisis levels and is likely to suffer further as multiple sources of government fiscal aid expire and the pandemic is forecasted to worsen. • Near-term risks include the wait for a coronavirus vaccine; absence of a federal fiscal stimulus package; and rising trade tensions with China. The Wall Street Journal's monthly Economic Forecasting Survey of more than 60 economists reported in September 2020 that more than two-thirds of economists predict a "Nike swoosh" -shaped recovery — while 15% anticipate a V-shaped recovery and 17% offer a more negative prediction. Whet villi w econmw recovery Jock 9ka (measuree #Y economic output in reel GOP to recovef tb tM pre-cr3s& k.WN)? 'N Ike sWwsh'-shaP@dr sharp drDp wlth gradual y 68.5% 4r9 V-shaped: sharp drop Wkwed oy sham rebound = 14,11% W-ohaped, a double -dip reremipn - 11.1% U-shaped: wish a prollor3yed bottom 13.7% L-shaped. no recovefy for the lioms&eable future 1 1.9% Much of the recent consumer activity has been attributed to essential workers in lower income brackets who have few alternatives to paying for food, fuel and other necessities while carrying on their duties. However, if more businesses close and more service workers lose employment, some forecasters anticipate a worsening economic trend before a recovery. The implications of such a scenario for local government are significantly greater, as a further economic downturn would coincide with an increase in needs for services like rental. food and shelter assistance. Two recent studies estimate that U.S. poverty, after temporarily improving with the release of CARES Act assistance at the beginning of the pandemic, has grown by six to eight million people since the aid began to expire. The federal CARES Act provided one-time assistance of $1,200 per adult and $500 per child in qualifying households, plus $600 in weekly unemployment assistance through July. Another study found that unemployed Americans accumulated the assistance in their savings accounts over the four months of April - July, then exhausted about two-thirds of the savings in August, the first month after benefits expired. BUDGET MESSAGE ■ Employed Receiving benefits X000 3500 3000 2500 2ooQ 1500 reb.202W,,,h April May June Ay Aug. Note: Median checking account balance Source: University of Chicago, JPMorgan Chase Institute