7 financial heavyweights have unveiled forecasts for a sudden US recession. Here's what they had to say about the economic damage coronavirus will cause.
GDP Forecasts – Goldman Sachs, Morgan Stanley, Deutsche, and J.P. Morgan predicted U.S. GDP will decline by 38-40% in Q2 2020, with Deutsche revising by 27 percentage points from March forecast

Summary:
- Actual Q1 GDP Decline – U.S. economy contracted by 4.8% in Q1 2020, according to incomplete data from Commerce Department, as nation felt impact of widespread lockdowns starting March 2020
- Q2 Economic Recession – As of May 15, 2020, Goldman Sachs, Morgan Stanley, Deutsche, and J.P. Morgan predicted largest quarter-on-quarter annualized decline of 38-40% in U.S. gross domestic product (GDP) in Q2, with Deutsche revising forecast from 13% in March
- Affected Industries – Include manufacturing with plant closures from biggest automakers, supply chain disruptions and affected production in China; services that need face-to-face interaction (e.g., sports and entertainment, transportation, hotels and restaurants); as well as construction and real estate sector from cancelled open house events and projects
- Worst Since WWII – Deutsche Bank and Bank of America compare dip in Q2 as worst quarterly decline since post-war period, dating back to World War II
- Bankruptcies and Trade War – UBS foresees potential bankruptcies in strained sectors and possible international trade war will add greater uncertainty to its forecast
- Second Half Recovery – Same banks did not revise expectation of recovery in 2020 H2, depending on effectivity of mitigation and testing, government stimulus package which could increase consumer spending, and ending of social distancing
Companies:
Bank of America
,
Deutsche Bank
,
Goldman Sachs
,
Morgan Stanley
,
UBS
Sources:
- Deeper Drop, Slower Climb, Apr 2020 (Morgan Stanley)
- Brace for the ‘deepest recession on record,’ says BofA analysts, as jobless claims surge to 6.6 million, Apr 2020 (MarketWatch)
- US Daily: A Sudden Stop for the US Economy, Mar 2020 (Goldman Sachs)
- Goldman Sachs Now Says Unemployment Will Peak At 25%, GDP To Fall 39% In The Second Quarter, May 2020 (Forbes)
- US GDP slumped 4.8% in the first quarter, ending the longest economic expansion on record, Apr 2020 (Business Insider)
- ‘Painfully evident’ damage: Deutsche Bank now thinks the US economy will shrink by nearly 40% in the 2nd quarter following coronavirus lockdowns, May 2020 (Business Insider)
- ‘The deepest recession on record’: Bank of America slashes forecasts, now sees up to 20 million jobs lost, 15.6% unemployment, and a shrinking economy for 3 straight quarters, Apr 2020 (Business Insider)
- Goldman Sachs has a devastating revision for its GDP growth predictions, Mar 2020 (The Week)
- 7 financial heavyweights have unveiled forecasts for a sudden US recession. Here’s what they had to say about the economic damage coronavirus will cause., Mar 2020 (Markets Insider)
- Morgan Stanley now thinks US GDP will shrink 30% next quarter as coronavirus pushes unemployment to historic highs, Mar 2020 (Markets Insider)
- Goldman Sachs now says US GDP will shrink 24% next quarter amid the coronavirus pandemic – which would be 2.5 times bigger than any decline in history, Mar 2020 (Markets Insider)
- UBS now sees a deep US recession by July due to the coronavirus pandemic, Mar 2020 (Markets Insider)
- The worst global recession since World War II: Deutsche Bank just unveiled a bleak new forecast as the coronavirus rocks economies worldwide, Mar 2020 (Markets Insider)
- St. Louis Fed Economic News Index: Real GDP Nowcast (STLENI), May 2020 (Federal Reserve Bank of St. Louis)
Original publication date: March 23, 2020
Date last updated: May 15, 2020