President Donald Trump is banking on a recovering economy to save his flagging re-election campaign — but one economist is warning that the resurgence in coronavirus cases is making a double-dip recession more likely.
Stephen Roach, a senior fellow at Yale University’s Jackson Institute for Global Affairs and a senior lecturer at the Yale School of management, tells CNBC that hopes of a so-called “V-shaped recovery” appear less and less likely every day.
“The odds of a relapse, not just the virus but in the economy itself — the so-called dreaded double-dip, is very real,” he said. “This behavioral capitulation on the demand side of the U.S. economy is going to continue to create a lot of problems for businesses, business hirings, [and] potential corporate bankruptcies in the second half of this year.”
Roach noted that while China has mostly succeeded in getting its productive capabilities back up to speed after the worst of the pandemic had passed, it has still seen lagging consumer demand, and he expects a similar pattern to occur in the United States.
“They’re struggling to bring consumer demand back especially for face to face services where individuals are fearful of getting re-infected,” he said.