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The Economy Won’t Be Back To Normal Until 2022 Or Later, According To Our Survey Of Economists

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It’s been about four months since the National Bureau of Economic Research declared that the U.S. was officially in a recession, and what a weird recession — and recovery — it’s been. The stock market has been merrily chugging along since February, when the recession began; disposable income increased even though millions of Americans were out of work; and unemployment has been bouncing back much faster than economists expected.

But there’s still a lot of uncertainty about what will happen as winter approaches and COVID-19 cases start to tick up again. And many economists are still not very optimistic about the speed of our trajectory back to a pre-pandemic economy — even though some signals might be improving.

In May, FiveThirtyEight kicked off a biweekly survey of 30-odd quantitative macroeconomists in partnership with the Initiative on Global Markets at the University of Chicago Booth School of Business. We asked the economists to forecast the trajectory of various economic indicators. And after 10 rounds of questions, it’s clear that on some metrics — particularly unemployment — the economists have become a lot more bullish about the speed of the recovery. Yet that optimism hasn’t translated into greater confidence that we’ll be back to economic normalcy anytime soon. In the latest round of the survey, conducted from Oct. 9 to 12, the economists collectively thought there was a 66 percent probability that the economy won’t truly be back to normal until 2022 or later.

“We generally think of the recession as something of a ‘swoosh’ shape, and we are now on the slow part of the rebound,” said Jonathan Wright, an economics professor at Johns Hopkins University who has been consulting with FiveThirtyEight on the design of the survey. “It was always easier to say that the recovery will be a slow grind than to know the near-term trajectory. So it makes sense that while economists got much more optimistic about the near-term, they largely kept their view that the damage will take a long time to repair.”

We looked at a handful of questions that we asked in nearly every round of the survey to see how things changed between the late spring and now. On one question — about the state of unemployment in December 2020 — the economists got markedly more optimistic. The average point estimate for December unemployment fell from 12.8 percent in late May to 7.4 percent in the current round.

A big source of the optimism, of course, is that workers have been returning to their jobs over the past few months much faster than economists initially expected. The unemployment rate in September was 7.9 percent — down from 14.7 percent in April. So in a sense, the current 7.4 percent prediction for December is actually pretty pessimistic — because it implies that, on average, the economists think there’s a good chance the unemployment rate will fall less than a percentage point over the next three months.

When it comes to fourth-quarter gross domestic product, meanwhile, the economists’ predictions were basically back where they started. In early June, the economists forecast 4.2 percent GDP growth in the survey, with a relatively wide confidence interval. In the last round, that forecast had improved only slightly, to 4.9 percent, and the confidence interval was just as wide — signaling that they hadn’t gotten any more sure about the outcome over the intervening months, either.

Of course, it’s worth noting that their forecasts for third-quarter GDP got significantly sunnier over the course of the summer, which might be part of the reason they weren’t expecting more quarter-over-quarter growth between the last two quarters of the year. But note how unsure economists still are about our economic situation at the end of the year. Allan Timmermann, a professor of economics at the University of California at San Diego who has also been consulting with FiveThirtyEight on the survey, said it’s “truly extraordinary” that the economists’ average band of uncertainty around their point estimate is essentially unchanged since June. “Normally, uncertainty would have been significantly reduced over such a long horizon,” he said.

Timmermann chalked up the uncertainty to the fact that so much remains unknown about how the pandemic will evolve. “Uncertainty about the trajectory of the virus and its impact on service sectors such as hospitality, travel, entertainment, eating out, remains in the forefront and has not really been resolved at this point,” he said. “Many firms are hoping to outlast the virus, but even at this point it is very unclear how long the pandemic will last.”

And that is perhaps why economists’ long-term estimates remain almost as dour as they were when the survey began. In every round, we asked them when GDP would return to pre-pandemic levels. Early on, the economists thought that there was a 67 percent chance that we wouldn’t be back to that point until the first half of 2022 at the earliest. In the last round, that outlook was basically unchanged.

Economists still think recovery will be slow

Expert estimates of when real GDP will have caught up to its pre-crisis level (Q4 2019)

round 2 round 10 difference
Earlier than first half of 2021 2% 1% -1
First half of 2021 11 8 -3
Second half of 2021 21 25 +4
First half of 2022 22 26 +4
Second half of 2022 20 20 0
First half of 2023 12 11 -1
Second half of 2023 7 5 -2
After second half of 2023 6 4 -2

Responses are from a survey of experts conducted from May through October. The question related to when GDP will return to pre-pandemic levels was worded differently in the first round of the survey and was therefore not included in the table.

Source: FIVETHIRTYEIGHT/IGM COVID-19 ECONOMIC SURVEY

Wright, meanwhile, thought it was possible that more bad news awaits us — in part because Congress still hasn’t acted to pass a second wave of fiscal stimulus, which the economists consistently told us was necessary to speed the economic recovery. “The combination of delayed fiscal stimulus and bad news on the virus could indeed cause something of a double dip later this year,” he said.

Neil Paine contributed research.

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

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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.”

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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

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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

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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.

What election stories need to get more coverage | FiveThirtyEight Politics Podcast

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