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Even With A Vaccine, The Economy Could Take Many Months To Return To Normal



Graphics by Jasmine Mithani

Once we find a COVID-19 vaccine, our lives can return to normal, right? Economists don’t think so.

Even if the vast majority of the population become immune to the coronavirus tomorrow, leading economists think it could take six months or more before our economy is back to where it was before the pandemic hit. And if a smaller share of the population became immune, economists think returning to economic normalcy would likely take more than a year.

In this week’s edition of our regular survey of quantitative macroeconomic economists,Initiative on Global Markets at the University of Chicago Booth School of Business, we asked the panel to close their eyes and imagine that a certain share of the population — 25 percent, 50 percent or 75 percent — were suddenly immune to COVID-19. Under each of those hypothetical scenarios, how long would it take to get back to pre-pandemic GDP (from the fourth quarter of 2019)?

As you can see, the varying levels of immunity made a big difference in the economists’ assessment of the speed of the recovery. The 32 economists who completed the survey collectively predicted that, if 25 percent of the population were suddenly immune to COVID-19, there would only be a 30 percent chance of GDP returning to its pre-pandemic level by the end of June 2021.

But for a universe where 75 percent of the population immediately had immunity to COVID-19, their forecast was much brighter: The economists thought, on average, that there was a 56 percent chance that GDP would be back to its pre-pandemic level by the middle of next year.

But even the consensus predictions for the rosiest scenario — which could, in reality, take months or years to emerge — weren’t actually that optimistic. In that fantasy world where 75 percent of Americans wake up tomorrow and are certifiably immune to the coronavirus, the economists thought there was only a 15 percent chance that GDP would return to its pre-pandemic level by the end of 2020, and only a 35 percent chance that GDP would hit that mark by the end of the first quarter of 2021.

A vaccine, in other words, is not an economic panacea.

“It’s important to keep in mind that although a pandemic was what started the whole recession, it’ll take some time to recover even when we get broad immunity,” said Tara Sinclair, an economist at George Washington University. “It’s not like people are just going to immediately go back to normal economic life.”

The problem, according to Sinclair and others, is that there’s been so much economic damage that a quick bounce-back is very unlikely, even after the threat of the virus starts to ebb. Millions of workers are unemployed, countless businesses are closed, and for many, the rhythms of work life may have been permanently changed. All of that helps explain why even under an unrealistically optimistic scenario, where much of the threat of COVID-19 vanishes overnight, a swift economic recovery might not immediately follow.

Not all of the economists in the survey were as pessimistic as Sinclair. If most Americans suddenly became immune to COVID-19, the virus could be contained relatively quickly, and most people would be eager to return to economic normalcy, according to Gloria Gonzalez-Rivera, an economics professor at the University of California-Riverside. She thinks consumers would be eager to take postponed vacations and head back to their favorite restaurants under this scenario, and decimated industries like hospitality and tourism would be able to revive quickly as a result. “We have a large pent-up demand, and the containment of the virus will be the catalyst for this demand to be released,” Gonzalez-Rivera said.

But Jonathan Wright, an economist at Johns Hopkins University who has been consulting with FiveThirtyEight on the design of the survey, told us that while some consumers might be eager to spend, it takes a long time for the economy to creak back into gear after recessions. “Individual people aren’t necessarily going to go on a spending spree whenever they stop being cooped up at home, and I certainly wouldn’t expect businesses to have that kind of impulse,” he said. “Business investment is generally muted after a recession, and I wouldn’t expect this one to be any exception.” That means, for example, it could take a while for unemployed workers to find new jobs, if the businesses that managed to weather the crisis are unwilling or unable to quickly scale up to where they were before the recession.

Optimism is growing for GDP recovery

It wasn’t all bad news, though. In a general sense, the economists have been slowly getting more optimistic about the economy over time. Since the last time we asked, on Aug. 10, their mean prediction for annualized third-quarter GDP growth has improved from +12.2 percent to +15.4 percent, with a sunnier best-case scenario and a less gloomy worst-case scenario. And their +5.8 percent forecast for fourth-quarter annualized GDP growth in this week’s survey is easily their highest prediction over the period in which we’ve asked the question (since June 8):

Allan Timmermann, an economist at the University of California, San Diego who has also been consulting with FiveThirtyEight on the survey, thought the uptick in the economists’ GDP predictions — although it was small — was noteworthy. To him, it signaled that either the economists think the worst of the crisis is over, or that they think the government will step in if the economy starts to slow down again.

In terms of jobs numbers, the economists also thought initial weekly unemployment-insurance claims were much more likely to dip below 700,000 for at least a week — in other words, returning to relatively normal numbers from pre-coronavirus times — between now and November than they were to return to a level above 1.5 million, where they had sat every week from March 21 through June 13.

How will weekly unemployment look late in the summer?

Probabilities that weekly initial unemployment insurance claims will fall into various ranges between now and the end of October, according to our survey of economists

Weekly initial claims will be… Probability
<700,000 for at least 1 week 33%
Between 700,000 and 1.5 million each week 50
>1.5 million for at least 1 week 18

The survey of 32 economists was conducted Aug. 21-24.


That was the good news. However, the economists gave a 50 percent probability for claims hovering between 700,000 and 1.5 million every single week for the next couple of months — essentially leaving American job recovery in a sort of plateau: not as horrible as the job losses from early in the pandemic, but nowhere near a true recovery, either.

What might change economic expectations

We asked our survey group what might make their outlook by year’s end better — or worse — than the median forecasts they gave us in the survey. Most of the scenarios we offered surrounding the November election didn’t cause them to budge substantially from their existing projections. They were somewhat more likely to think that fourth-quarter GDP growth would be substantially lower if Trump won a second term and control of Congress remained unchanged than if Biden won the White House, or if Democrats won control of the Senate and the presidency. They also thought that an election result that’s viewed as illegitimate by a majority of the country would be likelier to drag down GDP.

What would make the economy look better (or worse)?

Average probabilities that certain scenarios would increase or decrease fourth-quarter GDP growth projections, according to economists

In this scenario, Q4 GDP growth will be…
Scenario Substantially Lower about the same Substantially Higher
Vaccine approved by Election Day <1% 50% 50%
K-12 schools stay open 9 50 41
Democrats control White House + Congress 3 81 16
Biden wins; Congress stays same 3 91 6
K-12 schools teach virtually 19 81 <1
Trump wins; Congress stays same 22 78 <1
Election viewed as illegitimate 28 72 <1
No additional stimulus 75 19 6

The survey of 32 economists was conducted Aug. 21-24.


But the impact of the election was relatively small compared to other possible factors. On the downside, the economists still strongly believe that an ongoing lack of additional stimulus money from the federal government will cause serious damage to the economy. (You can read all about why in pretty much every previous installment of our survey.)

And on the upside, they believe that if K-12 schools reopened and maintained in-person learning through October, it would be a sign that the virus would likely be contained enough for other areas of the economy to improve as well. Meanwhile, if a COVID-19 vaccine were approved by the FDA by Election Day, they thought there was a 50 percent chance that GDP growth would be substantially better than their current forecast.

It might seem surprising to political junkies that something as momentous as the presidential election would have a much smaller predicted effect on the economy than schools reopening or Congress passing additional stimulus. Part of the issue, Sinclair said, is that if the election has an impact on the economy, it probably won’t be immediate. But she said that in general, there may not be much the next president can do to alter the country’s economic course, particularly if the House and Senate remain divided.

“Economists don’t think about the president as having a lot of power directly over economic growth,” she said. It’s Congress, after all, that gets to decide how the country’s money is spent. And while that might be somewhat different in a recession caused by a pandemic, it’s harder to predict which presidency would produce better growth numbers. “The way that the economy will look under these two different candidates is different — no question,” she said. “But quantitatively, will one clearly produce better GDP numbers than the other? I’m not sure.”

Some of these scenarios offer a glimpse into what a better-than-expected late summer and early fall might look like. But it’s also telling that the economists only gave a 50 percent chance of the economy being substantially improved with a vaccine quickly getting approval. That was in keeping with our earlier findings about the relationship between immunity and economic recovery: Yes, it’s better to have an effective vaccine earlier. But it will still take a long time to undo the damage of this recession, even after the root cause — the virus itself — recedes.

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Toronto FC hoping to make MLS Cup run having spent much of 2020 far from home



On a recent Thursday in Hartford, Conn., Toronto FC goalkeeper Quentin Westberg pondered the dichotomy of wanting to reach MLS Cup on Dec. 12, but also desiring to see his family again. Meanwhile, Jim Liston, the team’s director of sports science, was planning a trip to Lowe’s to buy 15 garbage cans so players could have an ice bath after training. As for manager Greg Vanney, he was fretting about his team’s health and the lack of practice time their schedule was affording.

Such is the life of a team as it attempts to not only navigate its way through the COVID-19 pandemic, but has been forced to do it away from home.

Due to travel restrictions between the U.S. and Canada, TFC — like the league’s other two Canadian teams, Montreal Impact and Vancouver Whitecaps — set up a “home” base in the U.S. for the remainder of the season; Toronto were stationed in Hartford. (Vancouver Whitecaps took roost in Portland, ground-sharing with Timbers, while Montreal Impact split use of New York Red Bulls’ facilities in Harrison, N.J.) This was on top of nearly every team spending nearly a month inside a bubble back in July at the MLS is Back Tournament outside Orlando, Florida.

The Reds spent about seven weeks back in Toronto as they played a series of matches against Canadian teams. In mid-September, the remainder of the regular season — and the temporary move to Hartford — beckoned. The vagabond nature of the campaign is what led Liston to joke that he was willing to discuss “whatever five seasons” the team has been through so far. But for Vanney and the players, the campaign has required a special kind of focus.

“A lot of what we’ve done here, and what we try to preach here is just control the controllables, and don’t get too drawn into the things you can’t,” Vanney told ESPN. “Roll with it, and make the best out of whatever the situation is.”

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Toronto has largely succeeded in spite of its odyssey. While there was disappointment at missing out on the Supporters’ Shield to the Philadelphia Union, TFC went 7-3-2 during its Hartford sojourn and finished with the second-best record in the league. But the challenges have still been immense. Simply being out of one’s home environment is difficult enough, but the time spent away from family and loved ones weighs heavy on the psyche, even as Vanney has given players the occasional trip back to Toronto — under quarantine — to reconnect with loved ones.

“It’s just very different, very challenging and emotionally exhausting,” Westberg said of his experience while based in Hartford.

Westberg has arguably had it tougher than most. The TFC goalkeeper is married with four children, including a baby girl who was born in June. For that reason, Westberg and his wife, Ania, made the decision at the end of September that it would be better for her and their kids to head back to his native France so they could be surrounded by family. Westberg called it “the least bad decision,” but there are difficulties nonetheless.

“I’m a very even person, and this year has challenged me a lot,” he said. “I’m still pretty even, but I keep a lot to myself and for sure there’s some difficult days, seeing your family [struggle] from your absence.”

The inability to be home has affected the players and staff in other ways. In Toronto, there are ways of disengaging from the game. Being with friends, loved ones or even in familiar surroundings can be the best medicine in terms of forgetting a bad game or training session. But in Hartford, at the team’s hotel, that escape is nearly impossible even as players try to distract themselves by reading or taking online classes.

“You don’t really unplug,” Westberg said. “You FaceTime family, or this or that, but it’s too short. You’re 100 percent focused on your soccer, and your whole day basically relies on being ready for whatever soccer activity that you have next, whether it’s practice or game. It’s good for your physique, it’s optimal for the way you eat and the way you [train]. But mentally, you’re not as fresh as your body.”

That isn’t to say there are only negatives to the separation. There is also an us-against-the-world mentality that Toronto has adopted, given that their players and personnel are experiencing the season in a way that is vastly different than most other teams. The team staff has done what it can to make their surroundings a home away from home, whether it’s personalizing the locker rooms at Rentschler Field or having hotel staff brand the surroundings in TFC colors. The hotel went so far as to bring in a barista who could consistently give the players their coffee fix. Supporters groups have even sent down banners in a bid to convey the fact that the players are remembered.

The care that TFC takes for players has extended to families back home, with the club supplying meals to loved ones three times a week.

On the logistical side, Liston made sure that one of the gyms used at MLS is Back was brought to TFC’s hotel in Hartford, and he remarked that the food at the hotel is “arguably the best we’ve ever had on the road.”

There have also been efforts to create new routines. Assistant coach Jason Bent, aka DJ Soops, has been in charge of the pregame music selection for the past 18 months — no easy feat for a squad that has a considerable international presence. In Hartford, Bent has set aside Thursday nights to spin music in one area of the hotel. He’ll even go live on Instagram or Twitch for those who prefer to relax in their rooms.

“[We] opened it to players and staff and basically anyone that’s part of our bubble to come relax, listen to music and just enjoy each other’s company,” Bent said. “I enjoy making people happy so if it’s helping everyone even in the slightest, I have no problem arranging the set and spinning.”

For Vanney, the pandemic and operating outside of the team’s home market has meant any number of challenges. He said the team has used three different training facilities in Hartford, with varying field conditions. He recognizes that the trips home are vital for the mental health of his players and staff, but any breaks also mean less time spent on the practice field. The compressed schedule, which at times involved games every three or four days, has had an impact as well. Even the best-laid plans in terms of squad rotation were impacted as minor injuries began popping up.

“We end up with a lot of guys in different positions because they need special kinds of treatment or care to help them get fit and back to health,” Vanney said. “So it ends up being a lot of different things kind of going on all at once, and that’s been the challenge of it.”

Recovery from matches has been complicated by the fact that TFC doesn’t have access to the same level of facilities that it does at home — hence Liston’s emergency trip to Lowe’s to fashion impromptu ice baths for the players. Then there are the different ways the players occupy themselves on the road as compared to home, especially amid the pandemic.

“There’s really no life outside of the hotel,” Liston said. “[At home], you may go walk the dog in the afternoon or go for a walk with your wife or friend or girlfriend or family and you’re out and about. The recommendation [here] is to kind of stay put. So you’ve got a really active population and pro athletes, who we’re asking them to be sedentary the rest of the time, kind of stay in the hotel from a COVID and safety standpoint. That’s not optimal for recovery either.”

There are also the creature comforts of home that are no longer available on the road, which can impact sleep.

“Sleep is the number one tool for recovery, and that’s definitely been a challenge,” Liston said. “We do well-being questionnaires and the scores on quality of sleep, and hours of sleep, just drop.”



Tom Barlow and Brian White seal Toronto’s fate in a 2-1 win for New York Red Bulls. Watch MLS on ESPN+.

Another change has been same-day travel, which has drawn mixed reactions from the TFC players and staff. Vanney and Westberg are generally in favor, saying it reminds them of when they each played in France. Flying back the same night also means a training day isn’t lost. Liston has a different perspective in that he prefers arriving the day before, and then leaving the same day.

“I think [same-day travel] makes for a really long day,” he said. “And there’s definitely a negative impact on performance, taking three bus rides and a plane ride before your game. You’re getting home — it can be 12:30, but it could also be 1:30 in the morning, and that’s where you know our well-being scores and sleep hours and quality just disappear. When you have so many games in succession, you can’t make up the sleep.”

With the playoffs set to begin for TFC on Nov. 24, the end is in sight, even as it makes for a complex — and even conflicting — set of emotions.

“This is the tricky part. I miss them a lot,” Westberg said of his family. “But in a way I want to see them as [late] as possible in December, because obviously, there’s this idea that we want to do well in the playoffs and we want to keep going. TFC has a history of setting high standards and high expectations. It’s a heavy load to carry but also an exciting one.”

Win or lose, it’s a season they’ll never forget.


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Bettman: NHL is mulling temporary realignment



The NHL is considering a temporary realignment of its teams for the 2020-21 season due to COVID-19 travel restrictions, according to commissioner Gary Bettman.

Bettman said Tuesday that restrictions on travel across the Canadian border, as well as “limitations in terms of quarantining when you go from certain states to other states” within the United States, could mean the NHL creates a more regionalized alignment for its upcoming season.

“As it relates to the travel issue, which is obviously the great unknown, we may have to temporarily realign to deal with geography, because having some of our teams travel from Florida to California may not make sense. It may be that we’re better off — particularly if we’re playing a reduced schedule, which we’re contemplating — keeping it geographically centric and more divisional-based; and realigning, again on a temporary basis, to deal with the travel issues,” Bettman said during a 2020 Paley International Council Summit panel with fellow commissioners Adam Silver of the NBA and Rob Manfred of MLB.

The NHL board of governors has a meeting scheduled for Thursday which will provide a progress report and possible recommendations for a season format, based on talks between the league and the NHL Players’ Association. The target date for starting next season remains Jan. 1.

Bettman said the league is considering a few scheduling options for the 2020-21 season. Something that’s off the table: playing the entire season in the kind of bubbles the NHL had in Toronto and Edmonton, Alberta, to complete last season. But Bettman said teams opening in their own arenas is a possibility, along with a modified bubble.

“We are exploring the possibility of playing in our own buildings without fans [or] fans where you can, which is going to be an arena-by-arena issue. But we’re also exploring the possibility of a hub. You’ll come in. You’ll play for 10 to 12 days. You’ll play a bunch of games without traveling. You’ll go back, go home for a week, be with your family. We’ll have our testing protocols and all the other things you need,” he said.

Bettman also indicated that the NHL is exploring “a hybrid, where some teams are in a bubble, some teams play at home and you move in and out.”

The NBA’s board of governors unanimously approved a deal with the players’ union that sets the stage for a season that will open on Dec. 22 and with a reduced schedule of 72 games. Silver said that the commissioners are in communication on COVID-19-related issues, especially the NBA and the NHL, since the two leagues’ teams share arenas and, in some cases, team owners.

Silver said he senses that the NBA will have fans in many of its buildings this season.

“We’re probably going to start one way, where we’re maybe a little bit more conservative than many of the jurisdictions allow,” he said. “What we’ve said to our teams is that we’ll continue to work with public health authorities. Arena issues are different than outdoor stadium issues. There will be certain standards for air filtration and air circulation. There may be a different standard for a suite than there will be for fans spaced in seats.”

Silver said there will be standardized protocols that are consistent from arena to arena, such as proximity between players and fans: “In certain cases, for seats near the floor, we’re going to be putting in testing programs, where fans will certify that they’ve been tested — some within 48 hours, some within day of game.” While Silver supported a continued expansion of the NBA postseason through its play-in tournament, Bettman said that he’s not in favor of expanded playoffs or “playing with the fundamentals of the game.” The NHL had 24 teams in its postseason last summer.


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The Battleground States Where We’ve Seen Some Movement In The Polls



With apologies to The Raconteurs, the presidential race continues to be “steady as she goes,” with little sign of tightening despite a plethora of new polls. FiveThirtyEight’s presidential forecast gives Joe Biden an 89 in 100 shot at winning the election, while President Trump has just an 11 in 100 chance. This makes Biden the favorite, but still leaves open a narrow path to victory for Trump, for whom a reelection win would be surprising — but not utterly shocking.

At the same time, we also have fewer polls from live-caller surveys, which have historically been more accurate and have shown slightly better numbers for Biden, than polls that use other methodologies, such as polls conducted primarily online or through automated telephone calls. Nevertheless, while the overall picture has shifted only a little in recent days, a few battleground states have seen at least some movement in their polls, which has slightly altered the odds Biden or Trump wins in each of those places.

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