Key Highlights
- Commerce Department reported that Q2 GDP fell -32.9%, the steepest decline in US history
- Consumer spending dropped -10.1%
- Economy lost -$1.8T in Q2, more than three times the previous record
- Additional -1.48M new unemployment claims during week before last in July, according to the US Labor Department
Nariman Behravesh, chief economist with IHS Market, pretty much summed up Q2 2020 economic news reported on July 30 by the US Commerce Department. “We’ve never seen anything quite like it.”
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The US economy plummeted a shocking -32.9% in Q2, the steepest decline EVER reported. Consumer spending dropped -10.1%, and the US Labor Department reported that the fourth week of July saw an additional +1.48M people file for claims for unemployment benefits. The week before, +1.43M people filed new claims for unemployment benefits. All in all, the fourth week of July marked the 19th consecutive week of more than one million people filing new unemployment benefit claims.
In the meantime, the supplemental unemployment benefit of $600/week has now expired as have eviction moratoriums. The US Senate has left Washington DC without coming to some kind of compromise with the House of Representatives on continued relief efforts for jobless workers.
Behravesh is not particularly optimistic about the state of the economy at this point. He said, “Our view is that we’re “not going to get to pre-pandemic levels of economic activity until some time in 2022.”
Diane Swonk, chief economist with Grant Thornton in Chicago, and Heather Bousky, president of the Washington Center for Equitable Growth, agree. In reference to US unemployment numbers, unemployment numbers, Swonk said, “We’re still in a desperate situation. This is unique in terms of the speed and magnitude of the job losses.“
Also in reference to unemployment figures, Bousky said, ”…a sharp drop in activity would have been just a good, necessary blip while we addressed the (COVID-19) virus. From where we sit in July, we know that this wasn’t just a short-term blip.”
As a comparison, Germany has also experienced the COVID pandemic and the lockdowns necessary to combat the virus but its GDP numbers are more than mild next to those of the US. Germany’s GDP suffered a -10.1% decline in Q2 (the steepest decline since tracking this data), according to its Federal Statistical Office and a -4.5% drop in unemployment numbers.
Thanks to National Public Radio and The New York Times.
Also read: Economy Shrinks -4.8% in Q1 – Likely Just “Tip of the Iceberg”, End of $600 Unemployment Bonus Could Push Millions Over Cliff, Robert E. Lee’s Boyhoiod Home Sells After 2+ Years & HUGE Price Drop
