Respondents report that last quarter was the worst since the global financial crisis for sales, prices, and capital spending, according to a National Association for Business Economics (NABE) survey released Monday.
“Firms have imposed a number of special measures to limit the negative financial impact of COVID-19 on their firms, including freezing hiring and terminating and furloughing employees,” said NABE Business Conditions Survey Chair Megan Greene, also a senior fellow at Harvard Kennedy School.
The Labor Department reported Thursday that the number of initial jobless claims in the United States rose to 1.4 million in the week ending July 18 amid a resurgence in COVID-19 cases, reversing nearly four months of consecutive declines in new applications.
With the latest numbers on unemployment benefits, a staggering 52.7 million initial jobless claims have been filed over the past 18 weeks, indicating the mounting economic fallout of the COVID-19 pandemic.
The NABE survey also showed that one in three firms has resumed normal operations, but nearly as many respondents say they don’t expect their firms to return to normal operations for more than six months.
“The vast majority of respondents anticipate COVID-19 will lead to more flexible hiring and work arrangements in the future, with 80 percent reporting their firms will continue to have some degree of remote working for employees post-crisis,” Greene said.
NABE President and KPMG chief economist Constance Hunter noted that the July survey results reveal continued changes in business conditions, but with “marked improvements” in most indicators compared to the April survey.
“While most respondents in April expected inflation-adjusted gross domestic product to contract from the first quarter of 2020 to the first quarter of 2021, two-thirds of panelists in the current survey expect an expansion from the second quarter of 2020 to the second quarter of 2021,” Hunter said.
The U.S. Commerce Department will release the advance estimate for gross domestic product (GDP) for the second quarter on Thursday.
According to the latest projection from the Federal Reserve Bank of Atlanta, real GDP in the second quarter is expected to contract at an annualized rate of 34.3 percent.