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Illustration: Aïda Amer/Axios

The Wuhan coronavirus outbreak is already scuttling supply chains and wreaking havoc on companies around the world that do business in China, but if analysts' projections are correct, the rebound from the virus could help propel the U.S. economy to new heights right around the time of the 2020 presidential election.

Why it matters: With President Trump touting the stock market's performance and jobs growth as key accomplishments, that bounceback could play a major role in the election's outcome.

What's happening: S&P Global expects the outbreak to "stabilize globally in April 2020, with virtually no new transmissions in May."

  • And most economists predict the world will get back to business as usual by the summer — and make up for lost time with accelerated economic growth in the second half of the year.

What we're hearing: "We’re likely to return not just to normal but above normal because of the U.S.-China trade deal," Kristina Hooper, chief global market strategist at Invesco, tells Axios.

  • "We got this really nice boost of sentiment coming from that phase one deal, and literally within a few days of that, global media started reporting on coronavirus."
  • "Once contagion is under control and stabilized, I think we’ll see a pop in consumer spending and corporate spending."

Plus, U.S. economic data had been strengthening ahead of the outbreak: Last month the all-important services sector notched its best reading since September; consumer confidence has been holding at historically high levels; and a private payrolls survey released Wednesday showed the highest job growth in five years.

  • Representatives from the National Retail Federation and National Association of Manufacturers tell Axios they expect their industries — two of the economy's biggest laggards in 2019 — to see a return of job growth and investment this year..

The intrigue: The U.S. economy may even have something of an insurance policy.

  • Investors are convinced that if growth does slow significantly, the Federal Reserve will lower interest rates, as they did in 2019, giving another boost to the economy.
  • China's central bank already has cut rates and injected hundreds of billions of dollars into markets to help offset the negative economic impact, and its government on Thursday slashed retaliatory tariffs on some U.S. imports by half.

But, but, but: The bullish expectations are based on the assumption that Trump won't ratchet up tensions with China again or launch a second trade spat with Europe.

  • The uncertainty of the trade war slowed global growth last year to its weakest since the financial crisis and led to reduced business investment for American companies in each of the last three quarters.
  • Further damage to business confidence could stunt investments and curtail job growth.

The bottom line: With limited options to further juice the economy — given that the Democrat-controlled House of Representatives would need to pass any new tax cuts or large-scale spending projects — Trump's best option for economic growth will likely be to do nothing.

  • And that's never really been his style.

Go deeper

1 hour ago - Health

CDC panel recommends Pfizer boosters for high-risk individuals, people 65 and up

Photo: Marco Bello/Anadolu Agency via Getty Images

A key panel at the Centers for Disease Control and Prevention on Thursday recommended the Pfizer-BioNTech coronavirus booster shots for people 65 years old and older, as well as those at high risk of severe COVID-19.

Why it matters: The approval is the near-final step in making the booster shots available to tens of millions of Americans, and comes a day after the FDA approved Pfizer boosters for the two groups. CDC director Rochelle Walensky is expected to accept the recommendation.

DHS temporarily suspends use of horse patrol in Del Rio

U.S. Border Patrol agents watch as Haitian immigrant families cross the Rio Grande from Mexico into Del Rio, Texas on Sept. 23, 2021. Photo: John Moore/Getty Images

The Department of Homeland Security on Thursday temporarily suspended the use of horse patrol in Del Rio, Texas a DHS spokesperson confirmed.

Why it matters: The suspension comes after images showing border patrol agents whipping at and charging their horses at migrants surfaced earlier in the week, prompting widespread criticism of the Biden administration's handling of the crisis at the border.

Southwest drought is worst on record, NOAA finds

In a stark new report, a team of NOAA and independent researchers found the 2020-2021 drought across the Southwest is the worst in the instrumental record, which dates to 1895.

Why it matters: They also concluded that global warming is making it far more severe, primarily by increasing average temperatures, which boosts evaporation.