Mark Zandi worries US risking second COVID-19 wave and depression without vaccine

Moody’s Analytics economist Mark Zandi is warning that a second coronavirus wave and depression is possible without a vaccine. 

“If we get a second wave, it will be a depression,” Zandi said on CNBC’s “Trading Nation” on Friday. “We may not shut down again, but certainly it will scare people and spook people and weigh on the economy.”

Zandi added vaccine would likely be necessary in the next year to avert a depression.

“It’s critical. It’s a necessary condition for the economy to fully recover,” Zandi said. “We’re going to see the market reevaluate things at some point.”

Zandi defined a depression as at least 12 months of double-digit unemployment.

The Labor Department on Friday announced that the jobless rate for April was 14.7 percent, a record post-World War II high. The unemployment report has had little impact on the stock market, with the Dow Jones Industrial Average, S&P 500 and Nasdaq composite closing nearly 2 percent higher by day’s end.

Zandi said on CNBC that the results indicated “the market is casting a pretty high probability of a V-shaped shaped recovery … the horizon may be a little short term: Next month, the month after, the month after that.”

Zandi also said that job numbers will likely begin a rebound by Memorial Day weekend as businesses gradually reopen, and predicted that, absent a second wave, the U.S. should see a stronger summer and early fall.

“After that, I think we’re going to be in quicksand because of the uncertainty around the virus and the impact that it’s going to have on consumers and businesses,” he said.

Anthony Fauci, the country’s top infectious diseases expert, has been among the voices warning that a second wave of the virus is likely in the fall. In April, he called it “inevitable.”