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The US economy’s growth is slowing as 2020 comes to a close, but a growing number of economists expect it to recover to its pre-pandemic strength in the second half of next year, as vaccines for the coronavirus become widely distributed.

That’s the view from the latest survey of the National Association for Business Economics (NABE). It found that 73% of surveyed forecasters say the economy will return to its pre-pandemic level by late 2021. This reflects greater optimism than the forecasters had expressed a couple of months ago when just 38% of them said they thought a full recovery could occur next year.

Economists have been saying for months that only when vaccines are widely available to control or defeat the virus will the economy be able to sustain a meaningful recovery from the worst economic downturn since the Great Depression.

Hopes that one or more coronavirus vaccines will roll out soon are helping to drive expectations higher, said the survey’s chair, Holly Wade. “NABE panelists have become more optimistic, on balance, with nearly one-third revising their outlook higher based on recent news of effective vaccines,” Wade said.

Pharmaceutical companies are asking US regulators to allow the use of their vaccines after reporting encouraging data from clinical trials. The hope is a wide rollout would mean fewer restrictions on businesses next year and more confidence among consumers to spend.

In the meantime, the economy is struggling to gain traction. Measures of consumer confidence, which is critical to spending and growth, remain well below their pre-pandemic levels.

Last Friday, the government reported that employers sharply scaled back hiring in November, adding only 245,000 net new jobs — the fewest since April and the fifth straight monthly slowdown. The report provided the latest evidence that the job market and economy are faltering in the face of a virus that has been shattering daily records for confirmed infections in recent weeks.

In the near term, economic activity is likely to slow further, with health officials warning against all but essential travel, states, and cities limiting gatherings, restricting restaurant dining, and reducing the hours and capacity of bars, stores, and other businesses.

But if the NABE’s forecasts are right, a full recovery could be reached by late next year. If so, it would mean a remarkably quick rebound for the economy after its breathtaking plummet during the spring. When the coronavirus was first spreading and governors around the country ordered businesses to shut down, the US economy shrank by a punishing annualized rate of -31.4% from April through June.

U.S Quarterly Growth in GDP (Annualized)

Source: US Bureau of Economic Analysis; chart courtesy of TradingEconomics.com

During the summer, however, as stay-at-home orders were lifted, the economy exploded higher off such a very weak base and grew at an annualized rate of 33.1% in the 3Q. Now that the easiest gains have been made, the economists surveyed by NABE say the economy likely has been growing at an annualized rate of 4.1% during the final three months of 2020. They expect growth to slow further to an annualized rate of 3% or less during the first three months of 2021.

The main concern going forward, of course, remains the pandemic. Even if a vaccine is approved quickly, it would be scarce at first, and most people wouldn’t be able to get vaccinated for a while. In the meantime, soaring COVID-19 numbers are forcing governments around the world to reimpose varying degrees of restrictions on businesses.

Slightly more than a quarter of forecasters surveyed by NABE, 27%, said the biggest risk facing the economy is inaction by Washington to offer more financial aid. The only risk cited more often was the pandemic itself, at 57%.

Economists and investors have been asking Congress and the White House to provide more support to help carry the economy through what’s widely expected to be a bleak winter. Momentum on Capitol Hill for a potential deal seems to have accelerated in recent days, but rancorous partisanship has prevented Democrats and Republicans for months from delivering more aid to laid-off workers and industries that have been hit hard by the pandemic.

The National Restaurant Association Research Group, for one, said Monday the US restaurant industry is in a “free fall” and again called on Congress to provide more stimulus.

The Association said it sent congressional leaders the results of a survey it conducted last month of 6,000 restaurant operators and 250 supply-chain businesses. It found that 87% of full-service restaurants reported an average 36% drop in sales, and 83% expect sales to be even worse over the next three months.

Sean Kennedy, the Association’s executive vice president for public affairs, said in the letter: “For every month that passes without a solution from Congress, thousands more restaurants will close their doors for good.”

I’ll leave it there for today.