The BEA reports Real GDP fell at 32.9 percent annualized. The quarterly decline compared to a year ago is 9.5%. Both are records.
Consumer Metrics Comments
Rick Davis at Consumer Metrics has additional comments.
Although there are some legitimately startling numbers in the release, the size of the headline number is a consequence of “annualizing” a single quarter of dramatic economic displacement.
The quarter might better be measured in a year-over-year comparison against the 2nd Quarter of 2019. In inflation adjusted “real” dollars the overall economy shrank by -9.54%.
Key Points
- Consumer personal expenditures declined only -1.79% in goods but -14.65% in services. The difference between those two categories makes sense — roughly the same spending level on groceries but fewer haircuts and massages.
- Food and beverages purchased for off-premise consumption was up nearly +6% year-over-year, spending on food services and accommodations was down nearly -40% year-over-year
- Spending on recreational goods soared (up +15.33% year-over-year), and spending on recreational services plummeted -54.13%.
- In the non-consumer sphere, spending by non-profits increased +51.53% year-over-year
- Commercial spending on computer hardware (+9.73%) and software (+6.13%) also increased year-over-year.
- Annualized household disposable income was reported to be $4382 higher than in the prior quarter, and the household savings rate was reported to be 25.7%, up 16.1pp from the prior quarter. These numbers comes from and annualization of the Federal relief payments from the CARES act, but the outrageous savings rate seems to indicate that households were reluctant (or unable) to spend those funds.
Mish
Well that seems like a dumb way to report GDP. By that metric, Kodac is up a billion percent over the past week, on an annualized basis, of course.
So much for “the greatest economy any president has ever created.’ NOT !!!!
Along with that ridiculous statement and attempting to postpone the election and attempting to curtail mail-in ballots,..Trumps new campaign slogan is,..
IITM = Insane In The Membrane
Did anyone see earnings from FAANG? They are doing extremely well during this “depression”. There is NO DEPRESSION. iPhone sales are UP huge.
The coronavirus is not a hoax. The recession/depression is a hoax. People are more flush during this period than not.
AAPL did a 4 for 1 split…now at $404
AMZN up $170 in afterhours
FAANGs all did quite well
Somebody Please wake up and realize its a DEPRESSION not a RECESSION !!!
“The US economy put it its worst performance in history.”
It’s what happens when state governments shut down their economies “non essential” businesses. California government is at least $54 billion in the hole and probably more with Newsom’s latest dictates.
Yes, I am better off than I was four years ago.
A note on the recreational spending, you might want to google “RV sales Pandemic”. That sector is booming, and most of those are built domestically.
To blame the decline of the US on the current or past presidents is a very narrow minded view.
Throughout history, the nation that had reserve currency status was the most prosperous ( great) nation until the curse of such status set in.
Think Greece, Rome , Byzantine, Arabia, Florence, Portugal, Spain, Netherlands, France, Brittain.
We are wittnessing the ending of this status that the US and it’s citizens have enjoyed for the last decades.
…and it’s ALL self-inflicted! Lockdowns were NEVER going to prevent people from catching Covid. The initial excuse by Fauci was to “flatten the curve” to prevent hospital overcrowding, which was not a problem. Now, they want to shut down because cases are high, even though death rates remain low and the tests are unreliable and massive over-counting is rampant.
I hope the elites and their sell-outs (including opportunistic bloggers) have their bunkers prepared. The truth will get out – link to armstrongeconomics.com
US government ran a cool $2 trillion deficit for the quarter.
“You’re gonna need a bigger deficit.”
Yes, and I read some guy (Ben Carlson on his finance blog) ran the numbers and the USA is now officially over the 120% govt debt-to-GDP figure that many banana republics default at. Not that the USA will default anytime soon, but it’s worrying (Japan is at 300%, though if you back out their massive domestic savings it’s more like 150% or so I’ve read).
“You’re gonna need a bigger deficit, right?”
tis but a flesh wound …
And Trump also said today that mail in ballots will make a mess of our election – filled with fraud – make America a laughingstock, so we should “delay” the voting. Like till he can be sure of winning or dies of old age which ever comes first.
This has broken Twitter today. The Lincoln Project 4 word response had over 50,000 likes within about 22 minutes. My response to him at Twitter was “over my dead body you orange baboon.” I got more than a few likes of my own.
Mail in voting is certainly subject to massive fraud. Democrats are desperate to get rid of Trump and will try any trick in the book to make it happen.
That is horse shit and if you have ANY evidence of what you say provide it so we can pick apart your stupid arguments point by point. But as I said to DT on Twitter today, why are you republicans so obsesses with imaginary voter fraud? Methinks you complain too much and after the bullshit you all pulled in 2016 I would think you would hesitate to remind people of election rigging.
Annualized. That’s the key. In actuality it’s 10% down for the quarter. That’s actually pretty good.
As I said, do you believe reports like this or do you believe blockbuster earnings reports coming out of TSMC, AMD, etc. Chip sales is a leading economic indicator. The fact they are going gangbuster means customers are flush with money. Their entertainment budget seems limitless.
#BestRecessionEva
Look at the positive side–we set a new record, unlikely to beaten in our lifetime.
Janet Yellen said something like that and look here we are!