DBRS Morningstar Releases North America Macroeconomic Update

DBRS Morningstar released its quarterly macroeconomic update for North America, discussing the emerging recovery from the COVID-19 pandemic.

In Q2 2020, the North American economy experienced the worst quarter on record, with output declining 9% QoQ (-31.7% annualized) in the United States and 11.5% QoQ (-38.7% annualized) in Canada. Although output is rebounding in the third quarter, 2020 will likely be the worst growth performance in the U.S. since 1946.

The North American economy bottomed out in late April as coronavirus cases and hospitalizations began to decline, and government authorities began the gradual process of easing restrictions on activity. Stimulus payments received during this period primarily found their way into savings accounts. Nonetheless, the rebound in consumption spending has begun, due to policy support and pent up demand.

“Continued fears surrounding the virus and its effects are holding back a stronger recovery in some sectors,” notes Thomas R. Torgerson, Co-Head of Sovereign Ratings for DBRS Morningstar. “Nonetheless, income support and an unusually high savings rate put consumers in a good position to increase spending as confidence returns. Policy support will likely remain in place, though fiscal policy outlooks are presently clouded by political uncertainty.”

The North America Macroeconomic Update is available at www.dbrsmorningstar.com.

For more information on the impact of coronavirus, visit www.dbrsmorningstar.com or contact us at [email protected].

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