El-Erian on the economy and coronavirus: It will be depend on whether people modify behavior

Mohamed El-Erian, chief economic adviser at Allianz, told Yahoo Finance’s On the Move Thursday that the recent economic data including second-quarter GDP and new data on weekly unemployment claims points to a “square-root” shaped recovery, with some leveling off now under way.

“It is the square-root recovery in the sense that we came down very sharply, we saw that in today’s 32.9% annualized contraction in GDP that you mentioned,” El-Erian said. “We came back strongly initially — we saw that in last month’s jobs report and the initial improvement in jobless claims, and now we’re getting the leveling off.”

“And that is of worry because not only do we have to deal with the damage that has been created to the economy, but also unfortunately we now become much more sensitive to any policy slippage,” El-Erian said. And I say that because …we also have continued disagreement on Capitol Hill as to what to do next with the relief package. “
#coronavirus #COVID19 #economicrecovery

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