US Economy Contracts by Most On Record In Q2, GDP Falls by 32.9%
The US economy contracted by most on record since the 1940’s, exposing the true extent of the damage caused by the coronavirus pandemic.
According to latest data released by the Commerce Department, GDP fell by 32.9% in the second quarter, which is the sharpest decline on a quarterly basis compared to records that date back to the 1947. Although Bloomberg economists projected a downfall of 34.5%, the continued drop in GDP despite record spending by governments is alarming nonetheless, especially after many restrictions were lifted in May.
Although employment numbers and consumer spending have slightly improved since mass reopenings were initiated in May, the country’s failure to mitigate the spread of the virus during the first wave has lead to a massive resurgence of infection rates. As a result, the recovery pace will most likely be significantly behind other regions such as the euro area, which took additional precautions since the onset of the pandemic.
As a means of distracting from the horrendous GDP number, it appears that US President Donald Trump has decided to make headlines in it’s place as well, with him suggesting that elections be delayed until people “can safely vote.” The timing of the tweet, relative to the GDP data release, suggests he was trying to distract from the data release.
Information for this briefing was found via US Commerce Department and Bloomberg. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
