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

How "naked ballots" could upend mail-in voting in Pennsylvania

Trump signs in Olyphant, Penn. Photo: Eric Baradat/AFP via Getty Images

Pennsylvania's Supreme Court ordered state officials last week to throw out mail-in ballots submitted without a required inner "secrecy" envelope in November's election, the Philadelphia Inquirer reports.

The state of play: The decision went under the radar alongside the simultaneous decision to extend the time that mail-in ballots could be counted, but Philadelphia's top elections official warned state legislators this week that throwing out so-called "naked ballots" could bring "electoral chaos" to the state and cause "tens of thousands of votes" to be thrown out — potentially tipping the presidential election.

Commission releases topics for first presidential debate

Moderator Chris Wallace. Photo: Drew Angerer/Getty Images

Fox News anchor Chris Wallace has selected what topics he'll cover while moderating the first presidential debate between President Trump and former Vice President Joe Biden next week.

What to watch: Topics for the Sept. 29 debate will include Trump and Biden's records, the Supreme Court, COVID-19, economic policy, racism and the integrity of the election, the Commission for Presidential Debates announced on Tuesday. Each topic will receive 15 minutes of conversation and will be presented in no particular order.

Fed chair warns economy will feel the weight of expired stimulus

Treasury Secretary Steven Mnuchin and Fed Chair Jay Powell bump elbows before House hearing on Tuesday. Photo: Joshua Roberts/Pool/AFP via Getty Images

Federal Reserve Chairman Jerome Powell told the House Financial Services Committee on Tuesday that the expiration of Congress' coronavirus stimulus will weigh on the U.S. economy.

Why it matters: Powell warned that the effects of dried-up benefits are a looming risk to the economy, even if the consequences aren't yet visible.

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