It's not a U. It's not an L. And it's definitely not an I.
- America's economic recovery has started. In economists' shorthand, it'll be a V (a sharp rebound), a W (a nasty double-dip) — or, most likely, something in between, Axios chief financial correspondent Felix Salmon writes.
- The consensus among economists is now that we'll see a "reverse radical" recovery. Think of a backwards square-root sign, where there's a sharp drop, a relatively small bounce back, and then a long period of subpar growth.
Why it matters: The shape of the recovery will directly affect the future of millions of unemployed Americans.
- It'll also determine whether small business owners, in particular, will be able to restart their entrepreneurial careers.
The best-case scenario is a V. White House economic adviser Larry Kudlow, for one, is sure the economic recovery will last: "I think we're off to the races in what will be a very strong V-shaped recovery," he said this week.
The worst-case scenario would be a W. Federal Reserve vice chair Randal Quarles is telling banks to prepare for "a W-shaped double dip recession."
Reality check: Many major industries, from live entertainment to air travel and even in-person shopping, remain in dire condition.
- International trade is looking very weak. Borders went up quickly once the virus hit, and will go down much more slowly.
- State and local governments seem certain to lay off millions more workers in coming months, given the unprecedented magnitude of budget crunches.
The bottom line: "We don't have a word for being in a depressed economy that's growing," says Heidi Shierholz, senior economist at the Economic Policy Institute.