Economists React To News Of Shrinking Economy

The news on the economy couldn’t be much worse. The Gross Domestic Product — the monetary measure of total value of goods and services during one year — fell by 33% in 2020. David Sowerby, Managing Director and Portfolio Manager of Ancora of Bloomfield Hills, told Michigan News Network this week it’s an accurate snapshot for what’s happening on the ground.

“When you talk to companies that are reporting second quarter profits that are probably going to be down by 35% to 40% and companies with a lack of visibility on forward guidance on their sales and profits, we’re connecting the dots that this is something we haven’t seen since, frankly, the 1930s.”

Sowerby says there is an expectation for the economy to rebound from the pandemic next year, which he says is why stock prices have been holding their own. Sowerby says investors consider fiscal and monetary stimulation will be likely.