Christophe Barraud
The economies of the United States and the eurozone are recovering now after the severe shock of shutting down in response to the coronavirus pandemic, but no one should think that conditions will return to normal any time soon, says Christophe Barraud, chief economist for Paris-based Market Securities and the winner of the Forecaster of the Month contest for June.
“I’m a bit pessimistic,” he says. “A full recovery will take a long, long time.”
Read more about Barraud’s views: Award-winning forecaster says U.S. economy might not heal by next year, putting stocks at risk of correction
While he’s quite uncertain about exactly how the pandemic and the economy will evolve, he’s convinced that there won’t be a full recovery until the end of 2022 at the earliest — more than two years away.
By “full recovery,” he means that gross domestic product gets back to the pre-COVID levels of the fourth quarter of 2019. A full recovery in the labor markets will take even longer, he predicts.
“Life won’t return to normal until an effective vaccine is found and distributed worldwide,” he says.
While Europe seems to be keeping the pandemic under control at present, the intensification in the United States is dragging down the economy. “The recovery has stalled,” he says. “People are avoiding restaurants” and other high-risk businesses.
In this environment, businesses and consumers are being particularly cautious. Many businesses will fail if they can’t attract more business soon.
Most businesses are waiting for clarity before committing to major capital investments or hiring, he says. There are too many uncertainties now revolving around a second wave of the pandemic, the U.S. presidential and congressional elections, Brexit, how well China will recover, and how fast global trade will revive.
In the meantime, the demographic challenges that were already pushing on the U.S. and European economies haven’t gone away. On the positive side, the failure of weak businesses and industry segments could make way for more vibrant business models in the longer term.
Barraud has won MarketWatch’s monthly forecasting contest three times, and he’s consistently been near the top of yearly rankings, finishing third the past two years. He’s won Bloomberg’s forecaster of the year contest eight times.
On five of the 10 U.S. indicators we track — nonfarm payrolls, retail sales, durable goods orders, consumer confidence and new home sales — his forecasts were among the 10 most accurate out of 44 forecasting teams.
| Barraud’s forecast | Number as reported* | |
| ISM manufacturing index | 44.7% | 42.1% |
| Nonfarm payrolls | -3.50 million | 2.51 million |
| Trade deficit | -$49.9 billion | -$49.4 billion |
| Retail sales | 11.1% | 17.7% |
| Industrial production | 2.9% | 1.4% |
| Consumer price index | 0.1% | -0.1% |
| Housing starts | 1.16 million | 974,000 |
| Durable goods orders | 16.6% | 15.8% |
| Consumer confidence index | 95.9 | 98.1 |
| New home sales | 666,000 | 676,000 |
| *Subject to revisions | ||
The runners-up in June were Michelle Meyer’s team at Bank of America, Brian Bethune of Tufts University, Ellen Zentner’s team at Morgan Stanley, Jim O’Sullivan of TD Securities, and Andrew Hollenhorst of Citi Research.
The MarketWatch median consensus published in our Economic Calendar includes the predictions of the 15 forecasters who have earned the most points in our contest over the past 12 months, plus the forecast of the most recent winner of the monthly contest.
The economists in our consensus forecast: Jim O’Sullivan of TD Securities, Christophe Barraud of Market Securities, Andrew Hollenhorst’s team at Citigroup, Ryan Sweet of Moody’s Analytics, Seth Carpenter’s team at UBS, Jay Bryson’s team at Wells Fargo, Michelle Meyer’s team at Bank of America, Jan Hatzius’s team at Goldman Sachs, Lou Crandall of Wrightson ICAP, Stephen Gallagher at Societe Generale, Peter Morici of the University of Maryland, Brian Wesbury and Bob Stein at First Trust Advisors, Spencer Staples of EconAlpha, Douglas Porter’s team at BMO Capital Markets, and Avery Shenfeld of CIBC.
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