The National Association of Business Economists polls members semi-annually to gain insight on economic trends. The August 2020 NABE Economic Policy survey covered a variety of topics including stimulus spending, when the recession will end, monetary policy and future policy focus.
Elevated Risk: U.S. economic conditions are unsettled heading into the fall, Robert Dye, Ph.D., the chief economist at Comerica Incorporated (NYSE:CMA), said, reacting to the NABE survey results.
"Most business economists believe that it will take some time for the economy to normalize after the historic contraction that we saw in the second quarter of 2020," said Dye. "While most economists do not think we will have a double-dip recession, they recognize that the risk remains elevated.”
Government Response, Policy: A majority (60%) believes Congress should extend both supplemental unemployment insurance and the Paycheck Protection Program for small businesses.
The government's response has been a sticking point, with lawmakers from both parties wanting to provide support to Americans, but disagreeing on how much should be spent as well as who should receive the help the most.
In the survey, 52% of economists supported a stimulus package of at least $1.5 billion.
A majority (56%) of respondents said that fiscal deficit should not be a concern during a recession.
More than three-quarters of panelists (77%) believe that the current stance of U.S. monetary policy is “about right.” The report also noted that 68% of respondents expect a rate hike the next time the Federal Reserve revisits the Fed fund target rate.
Future Government Focus: Economists' thoughts on when exactly the recession will end vary, with 35% expecting the current recession to end in the second half of 2020.
Nearly two-thirds (62%) of respondents believe that GDP levels will return to fourth-quarter 2019 levels in the first quarter 2022 or later.
The survey also asked economists about the three most important areas for policy focus. A variety of options were provided, and combating COVID-19 was voted the most important, with 54% of respondents choosing this option.
Promoting economic recovery and focusing on health policy were the next two most important focus areas, according to the economists surveyed.