S&P Global, which determines the credit ratings of major businesses and companies, says the world is already in a global recession because of the coronavirus and, based on their observations, it may take longer to return to normal than we think.
Using the lived experience of China as a model, S&P expects public restrictions and "social distancing" could possibly drag on into the third quarter of the year.
The note says that while the outbreak of the virus seems to have stabilized in much of Asia, the economic data for recent activity there suggest that it slowed economic activity far more than originally expected.
"We now have China as a model for how the virus' spread could stabilize and society could begin to return to normal," S&P said in the note. But even that is raising concerns about the damage to its economy.
"As China has shown, restrictions could be lifted more slowly than originally thought as public health concerns persist," he wrote.
Goldman Sachs advised their clients in a note yesterday that they expect the economy will grow by 3 and 4 percent in the third and fourth quarters of the year, but I personally find it easier to buy S&P's prediction that recovery will take longer than expected.
Even if S&P is wrong, the economy was not growing by nearly that much even before the virus first arrived in China. The American economy only expanded by 4 percent during one quarter of the entire Trump era and that only happened because American companies rushed to move as many goods as they could before Trump's tariffs on Chinese goods hit the books.
The economy was only expected to grow by 1.2 percent in 2020 before the virus showed up according to Goldman's own projections.
There's going to be a tremendous effort on the part of the Trump White House and portions of the media to sell the idea that things were great before the pandemic started because that's the only message Trump will have to carry into November, but it's not true. We were on shaky ground before the first American was infected.