Global| Jul 30 2020U.S. GDP Records Steepest Decline Since WWII
by:Tom Moeller
|in:Economy in Brief
Summary
• Coronavirus shuts down consumption & investment. • Housing declines sharply but government spending increases. • Price inflation turns negative. U.S. GDP declined 32.9% (AR) during Q2 2020 following an unrevised 5.0% Q1 fall. The [...]
• Coronavirus shuts down consumption & investment.
• Housing declines sharply but government spending increases.
• Price inflation turns negative.
U.S. GDP declined 32.9% (AR) during Q2 2020 following an unrevised 5.0% Q1 fall. The decline was the steepest of the postwar period. It contrasted with a 35.0% decline expected in the Action Economics Forecast Survey.
Domestic final sales fell 28.2% after a 4.6% drop. Consumer spending fell 34.6% (-10.7% y/y). It sapped 25.1 percentage points from GDP growth. Business fixed investment declined 27.0% (-8.8% y/y) while residential investment fell 38.7% (-5.2% y/y). Government spending rose 2.7% (2.1% y/y).
Inventory liquidation subtracted 4.0 percentage points from GDP growth last quarter. Improvement in the foreign trade balance added 0.7 percentage points.
The GDP price index declined a record 1.8% (+0.6% y/y). A 0.1% rise had been expected.
The GDP figures can be found in Haver's USECON and USNA database. USNA contains virtually all of the Bureau of Economic Analysis' detail in the national accounts. Both databases include tables of the newly published not seasonally adjusted data. The Action Economics consensus estimates can be found in AS1REPNA.
| Chained 2012 $ (%, AR) | Q2'20 (Advance Estimate) | Q1'20 | Q4'19 | Q2'20 Y/Y | 2019 | 2018 | 2017 |
|---|---|---|---|---|---|---|---|
| Gross Domestic Product | -32.9 | -5.0 | 2.4 | -9.5 | 2.2 | 3.0 | 2.3 |
| Inventory Effect (%-point) | -4.0 | -1.3 | -0.8 | -1.7 | 0.0 | 0.2 | -0.1 |
| Final Sales | -29.3 | -3.6 | 3.2 | -7.8 | 2.2 | 2.8 | 2.4 |
| Foreign Trade Effect (%-point) | 0.7 | 1.1 | 1.5 | 0.3 | -0.1 | -0.2 | -0.1 |
| Domestic Final Sales | -28.2 | -4.6 | 1.6 | -8.1 | 2.3 | 3.0 | 2.5 |
| Demand Components | |||||||
| Personal Consumption Expenditure | -34.6 | -6.9 | 1.6 | -10.7 | 2.4 | 2.7 | 2t.6 |
| Nonresidential Fixed Investment | -27.0 | -6.7 | -0.3 | -8.8 | 2.0 | 6.9 | 3.7 |
| Residential Investment | -38.7 | 19.0 | 5.8 | -5.2 | -1.7 | -0.6 | 4.0 |
| Government Spending | 2.7 | 1.3 | 2.4 | 2.1 | 2.3 | 1.8 | 0.9 |
| Chain-Type Price Index | |||||||
| GDP | -1.8 | 1.4 | 1.4 | 0.6 | 1.8 | 2.4 | 1.9 |
| Personal Consumption Expenditure | -1.9 | 1.3 | 1.5 | 0.6 | 1.5 | 2.1 | 1.8 |
| Less Food & Energy | -1.1 | 1.6 | 1.3 | 0.9 | 1.7 | 2.0 | 1.7 |
| Nonresidential Investment | 0.7 | 1.0 | -0.4 | 0.4 | 1.3 | 0.9 | 0.9 |
| Residential Investment | 1.1 | 2.3 | 2.4 | 2.2 | 2.8 | 5.6 | 4.5 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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