U.S. Economy Contracted at Record Rate Last Quarter; Jobless Claims Rise to 1.43 Million [View all]

[mahatmakanejeeves]

Last edited Fri Jul 31, 2020, 08:22 AM - Edit history (3)

Source: The Wall Street Journal.

U.S. Economy Contracted at Record Rate Last Quarter; Jobless Claims Rise to 1.43 Million
The Commerce Department's initial estimate of U.S. gross domestic product in the second quarter is the steepest drop in more than 70 years

By Harriet Torry
https://twitter.com/HarrietTorry
Updated July 30, 2020 3:21 pm ET

The economy contracted at a record rate last quarter and July setbacks for the jobs market added to signs of a slowing recovery as the country faces a summer surge in coronavirus infections.

The Commerce Department said U.S. gross domestic product--the value of all goods and services produced across the economy--fell at a seasonally and inflation adjusted 32.9% annual rate in the second quarter, or a 9.5% drop compared with the prior quarter. The figures were the steepest declines in more than 70 years of record-keeping.

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Read more: https://www.wsj.com/articles/us-economy-gdp-report-second-quarter-coronavirus-11596061406

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I need to correct my original post. The original post said that the US economy contracted by worst-ever 32.9% in Q2. No, it did not. It contracted at an annual rate of 32.9 percent. The actual drop was 9.5 percent. That's way different. Many people online have pointed this out. I should have caught that. I apologize for not having done so at the time.

Here's the original post:

Q2 GDP: US economy contracted by worst-ever 32.9% in Q2, crushed by coronavirus lockdowns

https://finance.yahoo.com/news/q2-gdp-us-economy-coronavirus-pandemic-consumer-171558880.html

Emily McCormick
Reporter
Yahoo Finance July 30, 2020

The US economy contracted at the sharpest rate on record in the second quarter this year, affirming fears that the coronavirus pandemic and measures to contain it drove a historic plunge in consumer and business activity.

Here were the main metrics from the Bureau of Economic Analysis' advance Q2 GDP report, compared to consensus estimates compiled by Bloomberg:

Q2 GDP annualized, quarter over quarter: -32.9% vs. -34.5% expected vs. -5.0% in Q1

Q2 Personal consumption: -34.6% vs. -34.5% expected vs. -6.8% in Q1

Core Personal consumption expenditures, quarter over quarter: -1.1% vs. -0.9% expected vs. 1.7% in Q1

{snip}

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Three months from today, just a week before the election, it will be right back up by the same amount.

The GDP reports come from the Bureau of Economic Analysis, which is part of the Department of Commerce.

From the source:

July 30, 2020
Gross Domestic Product, 2nd Quarter 2020 (Advance Estimate) and Annual Update
Real gross domestic product (GDP) decreased at an annual rate of 32.9 percent in the second quarter of 2020, according to the "advance" estimate released by the Bureau of Economic Analysis. In the first quarter of 2020, real GDP decreased 5.0 percent.

https://www.bea.gov/news/2020/gross-domestic-product-2nd-quarter-2020-advance-estimate-and-annual-update