Economic data remained mostly positive through the summer months with strong job gains, a surge in housing activity and expansion signals from the business sector. But the recovery appears to be decelerating with much of the pent-up demand from the lockdown satisfied, the initial fiscal stimulus mostly sunset, and renewed virus concerns and government responses flattening mobility. Despite double-digit annualized growth forecasted for Q3, real GDP is expected to decline by 4.1 percent this year due to the COVID-19 recession. Even if the economy can maintain above-trend job gains and real GDP growth in coming years, we expect the gap created by this year’s downturn won’t be filled for at least a couple of years.
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