Bank of America Global Research outlines its base-case for a US recession through Q3.
"We believe that the US economy has fallen into recession, joining the rest of the world, and it is a deep plunge. We now expect the economy to collapse 12% qoq saar in 2Q following only 0.5% growth in 1Q. Although the decline is severe, we believe it will be fairly short lived. We expect the economy to return to growth in 3Q.
For the full year, we forecast a contraction of 0.8%. Jobs will be lost, wealth will be destroyed and confidence depressed. The salvation will come if there is a targeted and aggressive policy response to offset the loss of economic activity and ensure a sound financial system," BofA notes.
"We expect a total of approximately 3.5 million jobs will be lost with the biggest hit in 2Q of 1 million per month. This will send the unemployment rate higher, nearly doubling to 6.3%. The industries to be hit the hardest are leisure & hospitality and retail. These sectors have a high share of hourly workers - about 80% for the former and 70% for the latter. And these workers struggle to work from home. This means they are vulnerable to a reduction in hours worked and likely outright job cuts," BofA adds.