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4/3/2020, 8:26 AM (Source: TeleTrader)
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US GDP to contract by 38% in Q2 - Morgan Stanley

Growth in the United States will contract by 38% in the second quarter of the year as a result of the economic crisis caused by the coronavirus pandemic, Morgan Stanley said on Friday. The new forecast sees a record low drop in economic activity in the US. Earlier estimates by Morgan Stanley said the US economy would contract 30% in the second quarter.

Meanwhile, the bank also revised its forecast for the first quarter from -2.4% to -3.4%. The newest predictions come after data from the US showed that initial jobless claims jumped to 6.6 million in the past week. Morgan Stanley also said it now sees unemployment in the US at 15.7% after previously expecting it to be at 12.8% in the second quarter. Furthermore, the financial institution noted that it expects the coronavirus crisis to result in a total of 21 million job losses.

Earlier, Morgan Stanley warned the global economy will enter a recession if the coronavirus outbreak continues into the third quarter of the year.

Breaking the News / VP