Thought Leadership Blog

Economic Forecast Insights

Economic Forecast Insights


RBC Capital Markets economist, Gerard Cassidy, shared his latest analysis and outlook for the U.S. economy with First American.

Executive Overview

Although this is the most severe economic contraction in our lifetimes, Cassidy anticipates that it will also be very short. Indeed, we can expect to see economic growth in the 2nd half of the year as more states open and allow companies to bring their employees back into the workforce. The Federal Reserve and the monetary policy should also have a favorable, if gradual, impact on the economy.

Employment Numbers

  • 20 million jobs lost in April

  • 80 percent are temporary losses

  • There is hope that the 2nd half of the year will regain more than 50% of the jobs lost

Manufacturing Outlook

We have entered a recession, but the silver lining is that it is not expected to be as severe as the Great Recession. The PMI index indicates a contraction, yet we will likely start to see improvement in the third quarter. Further, more offshore manufacturing jobs will likely come back to the United States after the pandemic, particularly in the pharmaceutical industry.

Federal Government

The delivery of fiscal and monetary policy has been impressive in terms of how aggressive and quickly it has come. This will likely lead to more positive results than what we experienced in ’08 and ’09.

Interest Rates

Rates remain at record lows and are expected to remain low. Still, it is unlikely that the Fed will move to negative rates. In a new development, the Federal Reserve has approval to lend directly to corporations for the first time in history. Banks still have quite high liquidity, hovering at around 25% of balance sheets, indicating that the banking industry is healthy and strong and able to withstand this period of time.