July 30, 2020
I've warned that the big economic crunch wouldn't hit right away, but that it would come down the road as the dominoes inexorably fall.
Well, we now learn the U.S. economy fell during the lockdown at a rate never before seen - 32.9% GDP drop!
Fox Snooze Business:
The Commerce Department’s estimate of the second-quarter decline in the gross domestic product, the total output of goods and services, marked the sharpest such drop on records dating to 1947. The previous worst quarterly contraction, a 10% drop, occurred in 1958 during the Eisenhower administration.
Last quarter’s drop followed a 5% fall in the January-March quarter, during which the economy officially entered a recession triggered by the virus, ending an 11-year economic expansion, the longest on record in the United States.
The contraction last quarter was driven by a deep pullback in consumer spending, which accounts for about 70% of economic activity. Spending by consumers collapsed at a 34% annual rate as travel all but froze and shutdown orders forced many restaurants, bars, entertainment venues and other retail establishments to close.
And a lot of small businesses are going to be unable to dig their way out of the hole. Bankruptcies are going to rise catastrophically this fall, I fear.
You can't just turn the economy on and off like that.
And people are going to die from this.
I hope these people are proud...
Posted by: Bill H at July 30, 2020 02:42 PM (vMiSr)
We need to get back to an economy based on production and not just consumption. But I fear Americans have gotten too used to cheap Chinese (and other foreign) goods. It's going to be hard to ween us all off that.
Posted by: Timothy Birdnow at July 31, 2020 08:40 AM (BtO0P)
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