In just a few months, the COVID-19 pandemic decimated the U.S. economy. The economic future depends on the virus’ future. I'm also an entrepreneur, an active angel investor, and sit on three outside boards. Buyers Scoop Up Dwindling Supply of Homes in October. One reason is that new-home starts will drop by 11%. "The Year 2040: Double the Pollen, Double the Allergy Suffering?" But that forecast comes with a stark warning. Accessed Nov. 25, 2020. That's the lowest level since 1963.. According to a University of Massachusetts-Amherst study, defense spending only creates 8,555 jobs per $1 billion spent. It also takes away from such key areas as health care and education. Congressional Budget Office. "Employment Situation Summary." Accessed Nov. 25, 2020. He is a professor of economics at the University of Rochester and was president of the … They may also increase the interest on the debt. These costs will rise from 17.7% in 2018 to almost 20% of total U.S. economic output over the next decade. One reason is the aging U.S. population and rising enrollment in Medicare. Global travel will have fully resumed. What Is the Current Fed Interest Rate and Why Does It Change? 1. “Annual Energy Outlook 2020,” Page 7. "National Climate Assessment." Global Change Research Program. The NAR expects sales to decline by 15%, even as prices rise. The recovery will depend on the widespread distribution of a vaccine. University of Massachusetts. The Congressional Budget Office (CBO) predicted the third-quarter data would improve, but not enough to make up for earlier losses. Bureau of Labor Statistics. Millions of asthma and allergy sufferers must pay for increased health care costs. Accessed Nov. 25, 2020. Accessed Nov. 25, 2020. U.S. Bureau of Labor Statistics. A weak dollar makes imports more expensive, contributing to inflation. I earned a B.A. Rich Karlgaard is editor at large at Forbes. The Federal Reserve and other experts predict the economy will remain subdued until 2021 or 2022. As people drop insurance, they are less likely to get preventive care. I'm the publisher of Forbes magazine, where I write a biweekly column called Innovation Rules. The dollar's value will continue to experience dips and swells, affecting everything you buy. Accessed Nov. 25, 2020. Accessed Nov. 25, 2020. The U.S. dollar value hit a high of 126.5 on March 23, 2020, as the pandemic sent investors scurrying to the dollar's safety. “U.S. U.S. stock markets were down more than 20% from their February peak. The pandemic has also shifted homebuyer demand away from the crowded cities and to the suburbs. There are several factors that could weaken the dollar, but its role as the world's reserve currency will keep its value solid. "What Percentage of the American Population Lives Near the Coast?" That could make insurance too expensive for most people., Over the next few decades, temperatures are expected to increase by between 2 and 4 degrees Fahrenheit. Warmer summers mean more destructive wildfires. Inflation returns after Donald Trump, worried about losing his reelection, fires the head of the Federal Reserve in the summer of 2020. This story appears in the April 2020 issue of Forbes Asia. U.S. Forest Service. Accessed Nov. 25, 2020. Narayana Kocherlakota is a Bloomberg Opinion columnist. That is, human nature doesn’t change all that much. Image by Michela Buttignol © The Balance 2020. Accessed Nov. 25, 2020. Home prices will increase a modest 1.1% in 2020 as the pandemic and the recession both weaken demand. Climate.gov. "DOD Releases Fiscal Year 2020 Budget Proposal." Some critics say this spending is not needed, given the lessened presence of the U.S. military around the world. Around the world, but mostly in the U.S. and China, there are more than 500 of these cocky “digital native” startups funded by venture capital. Easily bored, they want to get up and go. What Will the Economy Do in 2020 and Beyond? Kimberly Amadeo has 20 years of experience in economic analysis and business strategy. Accessed Nov. 25, 2020. Higher interest rates would increase the interest payments on the debt. It could make health care more expensive for everyone. They fear that the U.S. wants the dollar to decline so that the relative value of its national debt is less. The U.S. government may have to divert more funds to pay off that interest. U.S. National Ocean Service. Accessed Nov. 25, 2020. Big 3rd Quarter, Modest Growth Coming in 1st Quarter of 2021 - currently reading GDP growth in the upcoming first quarter of 2021 is likely to slow significantly. It also lowers export prices, spurring economic growth. There are other long-term trends that also affect the economy. Bureau of Labor Statistics. The end of the China production era then means good economic prosperity for the US and its allies. Unicorn startups will become an endangered species. This page has economic forecasts for Germany including a long-term outlook for the next decades, plus medium-term expectations for the next four quarters and short-term market predictions for the next release affecting the Germany economy. Bureau of Economic Analysis. Dr. Bill Conerly, with historical data from Bureau of Economic Analysis. The median core inflation rate is predicted to be 1.2% in 2020, 1.7% in 2021, 1.8% in 2022, … Global Stock Markets Could Predict Economic Future Post Covid-19. Accessed Nov. 25, 2020. "Consumer Price Index Summary." The Fed can maintain confidence in the economy by demonstrating moderation, resulting in less extreme changes in public economic behavior. "Projected Changes in Persistent Extreme Summer Weather Events: The Role of Quasi-resonant Amplification." They may diversify their portfolios with more non-dollar-denominated assets, such as the euro. Consequently, oil at one point plummeted below $30 a barrel while natural gas has already gone below $2 a thousand-cubic-feet. Accessed Nov. 25, 2020. In the long term, balancing the budget means spending cuts because Trump has cut taxes. "Climate Change Indicators: Ragweed Pollen Season." The other reason is that it will take years for homebuilders to restore supply to pre-pandemic levels. The World Bank. Getty. Reinsurance News. Population projections are attempts to show how the human population living today will change in the future. You may opt-out by, EY & Citi On The Importance Of Resilience And Innovation, Impact 50: Investors Seeking Profit — And Pushing For Change, Michigan Economic Development Corporation BrandVoice. National Income and Product Accounts Tables: Table 1.1.1. Will warmer weather in the northern hemisphere slow the infection rate? Abby Joseph Cohen, advisory director and senior investment strategist at Goldman Sachs, says there is a growing consensus among analysts that by the end of 2021, the economy will return to where it was in early 2020. Four possibilities stand out, starting with an end in three months or so. "Debt to the Penny." "Trade Weighted U.S. Dollar Index: Broad, Goods and Services." But in falling stock markets, investor horizons quickly shrink. "The U.S. Employment Effects of Military and Domestic Spending Priorities," Page 6. This announcement was abrupt and sudden and shocking for many people. In December 2019, the U.S. and China reached an agreement on Phase One of the trade deal in which China has committed to purchasing a substantial amount of U.S. goods and services in the next several years. For example, the GDP rate for the third quarter of 2020 was 33.1%, but it still was not enough to recover the prior decline in Q2., On Oct. 1, 2020, the U.S. debt exceeded $27 trillion. The COVID-19 pandemic added to the debt with the CARES Act and lower tax revenues. U.S. Energy Information Administration. Home prices will continue to rise in the long term, thanks to low interest rates and low inventory. Accessed Nov. 25, 2020. National Association of Realtors. In some areas, the pollen season is now 25 days longer than in 1995. Pollen counts are projected to more than double between 2000 and 2040., Most areas of the country are experiencing more frequent and longer heatwaves. The Federal Reserve and other experts predict the economy will remain subdued until 2021 or 2022. The debt level is not sustainable if interest rates were to rise. Digital success grows elusive as ad spend rises. Food prices may rise temporarily due to the pandemic. This page has economic forecasts for Ethiopia including a long-term outlook for the next decades, plus medium-term expectations for the next four quarters and short-term market predictions for the next release affecting the Ethiopia economy. Accessed Nov. 25, 2020. Accessed Nov. 25, 2020. “Annual Energy Outlook 2020,” Page 18. Accessed Nov. 25, 2020. Projected Changes in Persistent Extreme Summer Weather Events: The Role of Quasi-resonant Amplification, Climate Change: Information on Potential Economic Effects Could Help Guide Federal Efforts to Reduce Fiscal Exposure, Wildfire Premiums Could Become a 'Social Issue': Munich Re Climatologist, Whither the 100th Meridian? Global warming destabilizes the climate and creates extreme weather., Munich Re, the world's largest reinsurance firm, warned that insurance firms will have to raise premiums to cover higher costs from extreme weather. Collectively they have been valued at over $2 trillion. "Climate Change: Information on Potential Economic Effects Could Help Guide Federal Efforts to Reduce Fiscal Exposure," Page 1. Part II: The Meridian Moves East, Climate Change Indicators: Ragweed Pollen Season. Italy was in lockdown, with other nations in Europe and elsewhere close behind. As those borrowers go under, it will damage banks' balance sheets just like subprime mortgages did during the financial crisis. "Bark Beetle Fact Sheet." Higher interest rates may increase the cost of loans for U.S. businesses and consumers. Slowdowns in China’s growth could impact the U.S. economy in unprecedented ways. U.S. Energy Information Administration. I'm also a regular panelist on cable news' popular business show, Forbes on FOX (with an average viewership of 1.2 million households per show in 2012), and frequent guest analyst on CNBC's The Kudlow Report. These dead trees increase the intensity of wildfires., Droughts kill off crops and raise beef, nut, and fruit prices. Accessed Nov. 25, 2020. Population: 3,014,000. Money spent on defense increases America's debt. This will cap China’s growth potential in the years ahead. As of September 2019, China's economic growth has been at its slowest since 1990. But the nation is now so large that it will continue to affect the U.S. economy much more than in the past. 2. When and where will it all lead? When will a vaccine appear? U.S. Energy Information Administration. All Rights Reserved, This is a BETA experience. U.S. Environmental Protection Agency. "Monthly Supply of Houses in the United States." Centers for Medicare and Medicaid Services. What is the fatality rate across different population groups? GDP fell 31.4% in Q2 before rebounding 33.1% in Q3, but it still wasn't enough to recover the decline. Public events large and small—in sports, arts and business—were being cancelled. In the U.S. and U.K., the 2020 recession was felt as a financial disaster for part-time and hourly workers. Astrological Predictions For Indian Economy 2020-2022 Future Forecast: It’s been more than 3 years Since Our Prime Minister announced the crucial demonetization and banning of currency of 500 and 1000 notes across all over the country. The Federal Reserve has promised to keep interest rates at effectively zero for several years. U.S.-China Economic and Security Review Commission. Accessed Nov. 25, 2020. The economic benefits of a Democratic stimulus package would outweigh higher corporate taxes, says the investment bank. Those who predicted Covid-19 would usher in a new lifestyle built around teleconferencing, virtual entertainment and still more e-commerce—Nesting 3.0, as one forecaster called it—will have forgotten a key lesson. Subscribe to Forbes Asia. Projecting what the future holds is an important exercise for businesses looking to plan ahead. "Whither the 100th Meridian? Global Change Research Program. National Health Expenditure Projections 2019-2028, Repealing the Individual Health Insurance Mandate: An Updated Estimate, U.S. Petroleum Exports Exceed Imports in September, Testimony before the U.S.-China Economic and Security Review Commission Hearing on 'U.S.-China Relations in 2019: A Year in Review', United States and China Reach Phase One Trade Agreement, Trade Weighted U.S. Dollar Index: Broad, Goods and Services, Federal Reserve Issues FOMC Statement, Sept. 16, 2020, Monthly Supply of Houses in the United States, DOD Releases Fiscal Year 2020 Budget Proposal, Defense Budget Overview, United States Department of Defense Fiscal Year 2020 Budget Request, The U.S. Employment Effects of Military and Domestic Spending Priorities. The U.S. will rebound from a no-growth 2020 to 3% growth in 2021, but with it will revive a nasty and long-forgotten counterweight—inflation. Accessed Nov. 25, 2020. National health care expenditures will increase by 5.4% a year to exceed $6 trillion by 2028. Short-term prediction is difficult because of an entirely new actor on the economic field—the virus. Percent Change From Preceding Period in Real Gross Domestic Product,” Accessed Nov. 25, 2020. "Climate Change." Petroleum Exports Exceed Imports in September.” Accessed Nov. 25, 2020. Board of Governors of the Federal Reserve System. 2. The new Federal Reserve head is an ardent supporter of modern monetary theory. U.S. Energy Information Administration. The Congressional Budget Office (CBO) projected that 13 million people could drop coverage by 2027. As healthy people leave the insurance system, it will raise costs for insurance companies. Part II: The Meridian Moves East." Accessed Nov. 25, 2020. You don't have to worry as much as you did in the past about inflation eating away at your retirement savings. Leftwing politics will become more extreme in 2021. Once a COVID-19 vaccine is widely distributed, housing demand will return to pre-pandemic levels. Businesses react to this uncertainty by hoarding cash, hiring temporary instead of full-time workers, and delaying major investments. The Effect of Presidential Economic Policy on the Economy, Top 10 Economic Predictions for the Next 10 Years, Extreme Weather Threatens the Financial System, Health Care Costs Will Continue to Increase, U.S. and Chinese Economies Will Be More Intertwined, The U.S. Will Be Involved in Fewer Ground Wars. Inflation. "Testimony before the U.S.-China Economic and Security Review Commission Hearing on 'U.S.-China Relations in 2019: A Year in Review',” Page 2. What will the world look like? "Federal Reserve Issues FOMC Statement, Sept. 16, 2020." China has maintained a fixed peg to the dollar for its currency, the yuan. The other extreme was a prediction for 0.7% growth. For co-founding Silicon Valley's largest public affairs organization, the 6,500-member Churchill Club, I'm a past Northern California winner of Ernst & Young's prestigious "Entrepreneur of the Year Award." The economy has been devastated by the COVID-19 pandemic. China will benefit from its bet on stockpiling oil reserves at cheap prices in 2020. In the middle of all of this, Russia, Saudi Arabia and the United Arab Emirates decided to add four million barrels of oil a day to an already glutted supply. But the baseline for the forecast assumes that Indiana will remain at Stage 5 of the governor's plan to … The Fed knows this is how former Fed Chair Paul Volcker ended the stagflation of the 1970s. Accessed Nov. 25, 2020. Gavin Newsom boasted in February’s state of the state address. Because China is the second biggest purchaser of U.S. debt, as its demand for Treasurys declines, interest rates could rise. One reason is that the Fed has promised to keep interest rates at historic low levels through 2023. This will keep mortgages very affordable until then. Has Donald Trump Brought Back American Jobs? Accessed Nov. 25, 2020. SciencesAdvances. They will transmit those costs to the insured, further raising health care costs. "2020 Housing Market Forecast." "Climate Change and the Federal Reserve." Which policies are best at slowing its spread (and do they vary by country)? U.S. Deutsche Bank: "The worst global recession since World War II" Deutsche Bank predicts that the US … With a virtually unlimited ability to print cash, and an election promise to spend trillions in new infrastructure, Trump managed to hang on and win reelection. U.S. Department of the Treasury. State economic forecast shows $641M budget surplus for '20-21 State's November spike might lead to Christmas restrictions Mpls. Anyone who claims to know the answers is guessing. Accessed Nov. 25, 2020. Still, not all the wind will be at China’s back. As an author and global futurist, he has published several books, the latest of which is Late Bloomers, a groundbreaking exploration of what it means to be a late bloomer in a culture obsessed with SAT scores and early success. This page has economic forecasts for the United Kingdom including a long-term outlook for the next decades, plus medium-term expectations for the next four quarters and short-term market predictions for the next release affecting the the United Kingdom economy. Getting informed about collapse and crisis may earn you, or prevent to lose money. A slowdown in Chinese exports may also increase prices for U.S. consumers. The Year 2040: Double the Pollen, Double the Allergy Suffering? It's used more than any other currency for international transactions. Sovereign Debt and the Financial Crisis: Will This Time Be Different? Will the pandemic expand in South America and Africa this fall? Unemployment rate: 3.4% 2019 job growth: 1.1% (14,300) 2020 job … Accessed Nov. 25, 2020. Percent Change From Preceding Period in Real Gross Domestic Product, Advance Monthly Sales for Retail and Food Services: April, An Update to the Economic Outlook: 2020 to 2030, Gross Domestic Product, Third Quarter 2020 (Second Estimate); Corporate Profits, Third Quarter 2020 (Preliminary Estimate). The $27 trillion debt and federal budget sequestration that's reduced spending on some items mean that the U.S. really can't afford to wage large ground wars anymore., In March 2019, the government increased the Fiscal 2020 national security budget to $750 billion. The Department of Defense said that this increase will strengthen its competitive edge and help the military succeed by prioritizing innovation and modernization in war for decades to come.. In 2019, the uninsured no longer had to pay the Obamacare tax. Here are five predictions. The 2021 economy got its monetary jolt. A crisis on this scale can reorder society in dramatic ways, for better or worse. This report sets out our latest long-term global growth projections to 2050 for 32 of the largest economies in the world, accounting for around 85% of world GDP. Accessed Nov. 25, 2020. The Congressional Budget Office (CBO) predicts a modified U-shaped recovery. Extreme weather caused by climate change is likely to worsen. The U.S. debt-to-gross domestic product ratio rose to 127% by the end of Q3—that's much higher than the 77% tipping point recommended by the International Monetary Fund.. "Wildfire Premiums Could Become a 'Social Issue': Munich Re Climatologist." Gas prices are expected to remain below $3 a gallon through at least 2030. Lower gas prices can also drive down the price of groceries, which benefit from lower transportation costs. RUSSIA AS WE KNOW IT ‘WON’T EXIST’ The next decade will see Russia “seeking to secure itself” … This constraint in supply will support home prices. Brian Barnier is the Head of Analytics at ValueBridge Advisors, an editor at Fed Dashboard & Fundamentals, and a guest professor at CUNY. The Federal Reserve Board. In the second quarter, it plummeted by 31.4%, but then it rebounded in the third quarter to 33.1%. In April, during the height of the pandemic, retail sales plummeted 16.4% as governors closed nonessential businesses. Furloughed workers sent the number of unemployed to 23 million that month. By October, the number of unemployed declined to a still-horrendous 11.1 million.. Extreme weather caused by climate change is likely to worsen. © 2020 Forbes Media LLC. "Sovereign Debt and the Financial Crisis: Will This Time Be Different?" The Once and Future Physical and Human Geography of America’s Arid–Humid Divide. The Federal Reserve's economic forecasts reflect a wide range of views about the course ahead. U.S. Department of Defense. Accessed Nov. 25, 2020. U.S. The COVID-19 pandemic will affect the housing market through 2021, according to the National Association of Realtors (NAR). “Annual Energy Outlook 2020,” Page 4. Accessed Nov. 25, 2020. "Gross Domestic Product, Third Quarter 2020 (Second Estimate); Corporate Profits, Third Quarter 2020 (Preliminary Estimate)." For his past columns and blogs visit our website at www.forbes.com/sites/richkarlgaard. Building that infrastructure in the US could lead to an economic boom in the US by 2022. With that summary in place, we turn to … This leads to illness and death, as well as damaged crops and dead livestock, plus power outages., Almost 40% of the U.S. population could be flooded from rising sea levels. Rising sea levels cause hurricanes and storms to push farther inland. Extreme weather, such as heatwaves, hurricanes, and wildfires, could increase by 50% in North America by 2100. It could cost the U.S. government as much as $112 billion per year, according to a report by the U.S. Government Accountability Office (GAO).. American Meteorological Society. She writes about the U.S. Economy for The Balance. Once the public expects inflation, it becomes a self-fulfilling prophecy. The production of crude oil is expected to rise to 14 million barrels per day by 2022 and remain near this level through 2045. Shale oil has driven this growth since 2010. Demand is expected to remain subdued thanks to increased use of alternative energy., In 2019, the U.S. exported more oil than it imported for the first time since 1973. U.S. oil exports are expected to increase through 2033.. Health care costs will continue to rise. Federal Reserve Bank of San Francisco. "An Update to the Economic Outlook: 2020 to 2030." If China’s exports decline, it could buy fewer U.S. Treasury notes. U.S. Government Accountability Office. In the first quarter of 2020, growth declined by 5%. The forecast offers a glimmer of hope of stronger, positive economic growth in the second half of 2021 in Indiana, setting up 2022 for positive economic output. Accessed Nov. 25, 2020. As many workers look for larger homes, smaller condos and townhomes may become more affordable. That's unlikely as long as the U.S. economy remains in recession. From extreme weather to rising health care costs and the federal debt, here's how all of these trends will have an impact on you.
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