US economy to slow in first quarter of 2021 but reach pre-Covid levels in a year: Poll

BENGALURU (REUTERS) - US economic growth will lose momentum this quarter and next but expand faster than previously thought after that, according to a Reuters poll of economists, a firm majority of whom now expect the economy to reach pre-Covid-19 levels within a year. While the near-term economic outlook has dimmed again as the US remains the country worst-hit by the pandemic and on uncertainty about a fresh fiscal package, Wall Street stocks have reached record highs on positive vaccine news. The growth outlook for the current and next quarters was lowered in the Nov 30-Dec 8 poll. A few respondents predicted a double-dip, expecting the economy to contract again next quarter. "We expect the rising threat of Covid-19 to dampen growth through the first months of 2021, followed by further fiscal support from the prospective new administration in reaction to the rise in hospitalizations," noted Ellen Zentner, chief US economist at Morgan Stanley. "Downside risks are dominated by Covid-19, and particularly if broader-than-expected shutdowns over the winter and a delayed vaccine come in the absence of further fiscal stimulus. In this scenario, a more drawn-out recovery would lead to lo...