In the United States, too, there is now a quasi nationwide curfew, which the US President recently extended until the end of April. In the second quarter, the US economy is therefore likely to suffer a much deeper slump than initially assumed. We expect an unprecedented slump especially in private consumer spending in Q2. This will primarily affect the household-related services sector, but many other sectors of the economy are now at a standstill as well. As a result, unemployment has already skyrocketed and will continue to rise. If private households are not (yet) affected by this themselves, they will limit consumer spending to the bare minimum simply because of a great deal of uncertainty.
Ultimately, we expect gross domestic product in Q2 to decline by around 30 percent projected for the year. The extensive support package passed by Congress a few days ago cannot prevent this slump. According to estimates, it will take 3 to 4 weeks before the first financial aid reaches private households and the affected businesses. Primarily because of the rise in unemployment, we expect only very limited catch-up effects in the third quarter, so that the US economy is likely to shrink by around 6 percent this year.
The positive effects of the fiscal support measures should then become more visible in the fourth quarter. Despite catch-up effects in private consumption, however, we caution against overly optimistic consumption dynamics, as unemployment is likely to fall only very hesitantly in some sectors of the economy. However, since US exports are likely to benefit from the revival of international trade and investment activity is also gradually picking up again, we expect economic growth of 5.6 percent in 2021