Topic: US economy suffers worst decline as GDP contracts by 32.9% in the second quarter (Read 604 times)

USA was hit big because they have the biggest cases, the major contributory factor is the covid-19, there's none other things to be blame here.
However, it's not only the USA who got hit and into recession already, some countries also struggle as well especially my beloved country the Philippines.

Per report found here ; https://think.ing.com/snaps/philippines-economy-crashes-into-recession-2q-gdp-at-16.5/


Until there's no vaccine for covid-19, we can expect the worst, sorry but it is the reality.

aren't we paying for it now? CPI doesn't tell the whole story. in fact, that's one of the whole scams behind the dominant economic metrics used today. they focus on things like day-to-day consumer consumption. CPI tells us the cost of food, clothes, medical care, things like that. it doesn't tell us what's happening in markets with elastic supply and demand and it doesn't tell us anything about investments.

just look at the price of gold or bitcoin---they're becoming increasingly unaffordable. just imagine what happens when bitcoin breaks above the 2017 high.

economists only care about achieving stable CPI inflation. they don't care that over time, you or i can afford less and less of assets capable of storing any value.

we need to switch to a more holistic approach to measuring the effects of inflation---one that takes into account rising/falling prices across all markets. i doubt that will happen because mainstream economists, heads of industry, and governments all have a strong interest in downplaying how virtually all economic growth today is being siphoned into the financial markets, leaving the working class (who don't have exposure to the markets through retirement accounts and property ownership) increasingly poor relative to real asset values.

the whole system is set up as a land grab.

It's coming back, some sectors are bouncing back, some will take more time. Some industries are hit hard; like Bars, Nightclubs, Movie theaters, etc...they can not make up the lost revenue.

Look at the markets, tech is booming.

Will we pay for all the money printing down the road...some economist say YES, other say NO; so who knows...

Because as people have said before it's not really 33% but more like 10% and because this is not the same as the previous crises in history, this is not a shutdown of the economy because businesses go bankrupt but self-inflicted with forced closures.

Trouble finding food?
With people habits changing we have excess productions in some areas and excess food:
https://www.dw.com/en/covid-19-crisis-belgians-called-upon-to-eat-more-fries/av-53310312
https://www.usnews.com/news/best-states/articles/2020-05-21/covid-19-poses-an-unprecedented-crisis-for-potato-farmers

People are staying at home, buying and cooking for themselves, since the easy option fo going out is out of the picture they are wasting and throwing out far less food and so a lot remains in the shops and deposits, ironically ...turning nevertheless to waste.
The difference is that no longer people who buy it throw it out is directly the producers. Once the chains start diverting their production where it matters we will even see a drop in food price.


Well, the GDP is down for the 3 previous months, the effects have already been felt in the economy yet, does it resemble the 1929 crisis? No! And it will not be like that.
Wait for the 3rd quarter, you will suddenly see that things are not looking as scary as they seem now.

I still can't believe people are thinking that just because stock markets soared and the likes of JP Morgan and Chase and so forth made profit the economy is back on track. We are talking about 33% drop in GDP, do you know how bad that is? Let me put it in this perspective, the GDP fall in the great depression of 1929 where people had trouble finding food to eat was around 15% and the 2008 drop in GDP was a bit over 1%, we are talking about 33% right now, it is record breaking and there has never been anything similar to this in US history before.

Yet somehow people are acting like everything will be alright when the government is printing trillions of dollars to stop the bleeding and paying citizens money for doing nothing just so the economy could stand on its feet once again. Things are going awful!

that's the annualized rate. the quarter over quarter drop was a slightly less scary 9.5%.


where i live, all the bars are closed again, and no more dining in at restaurants. a couple local businesses have closed for good.

july unemployment numbers get published later today. i'm eager to see whether the june recovery was a fluke or not. my feeling is it's gonna be a long and painfully slow recovery to get back to pre-pandemic employment levels.

the expansion of amazon and other e-commerce and delivery companies also has major implications for the shape of the economy. going forward, we should see less full-time workers with benefits and more gig workers and part-time workers.

I don't think so that they can make large movements quickly because right now they are still suffering from the pandemic outbreak and we all know that they are one of the most populated countries. Today there are a lot of people lost their job because some of the companies and business don't want to operate and they want to avoid getting spreading of this virus immediately even this is a good thing but still one of the problem how does the economy brings back to normal if the virus is still spreading we need to wait for the COVID vaccine or resume all of the things to we can go back to normal and risk a large number of people that can possibly get infected.

In his statement before, "Make America Great Again", I really don't see improvements and equality in his term, even right now. All of his words are not put into actions, so I don't expect for the economy of US to suddenly bounce back after this pandemic ends. It is not that easy to recover from an economic crisis if the leader is not that responsible enough about its duties. Also the mindset of the President is really a must, he should know how to prioritize things so that economic recovery will not be delayed.


Most of the running Presidents in US do not look responsible enough for me. But what can we do if we didn't give them a chance to prove their duty in their territory. Overall, US is a good country and a well-developed country.

Maybe because everyone is flocking to Dorset? From a few images I saw in the news seems like a bigger crowd than at the landing of Cnut the Great   
But yeah, I think there should be a sizeable decline everywhere, and the bigger and livelier the city the worse the decline, I would say that we're at about 80% overall activity in city center, but here in CE, we have managed to get away with fewer cases and victims that the western part of the continent.


I expect the office/business rental to take a solid hit in the next period and then all that depends on it, coffee places and restaurants that fought so hard for a place near those will be the second wave of victims, that if they somehow managed to survive till now.
If this goes on for another year there will also be shifts in rent in house pricings, and god knows what those will trigger for some cities. A revival of the rural areas? Would be interesting.


News have become a serious business, you have to put more emphasis on marketing than selling actual products and nothing gets more views and rating that big numbers, just wait for the next quarter and they will forget how they reported this decline and switch to another model that would produce some clickbaitish results. A 9.5% decline is on par with Germany if I remember correctly their numbers, and even better than Italy Spain, which enforces my view, some countries in the EU will be hit worse longterm.

The 32.9% drop is actually the annualized rate.  The drop was only 9.5% year over year, and was extrapolated to get the annualized rate, which really doesn't make sense and is a bit of reckless reporting considering the strict shutdown conditions that existed in the second quarter will not exist for the full year and so we are not going to see a full 33% drop in annual GDP.  But the bigger number gets more clicks.  The silver lining is that things aren't actually as bad as was reported.

Source: https://www.npr.org/sections/coronavirus-live-updates/2020/07/30/896714437/3-months-of-hell-u-s-economys-worst-quarter-ever

It is difficult to predict, as obviously the economic effects of an event can be felt long afterwards. We also have to consider whether there might be any partial or localised lockdowns in the future as the number of new cases remains high. Also, easing of lockdown and people returning to work might just mean that the damage stops getting worse. In the US this is complicated by the upcoming election. You might imagine that Trump will do anything he can to prop up the economy and make it look good in the short-term, with the longer-term effects of this only being felt after the election.

Same here in the UK. Lockdown is over, but city centres and out-of-town retail parks are still extremely quiet. Some businesses remain temporarily closed, some have closed permanently. People are allowed to go out, but aren't. The government is giving people 50% off prices for eating out on certain days - but the restaurants still look fairly empty. People know that the virus is still out there. The economy here will not recover any time soon.

Yes, I suspect that as everywhere else, there has been a surge in online orders. But this works disproportionately in favour of Amazon etc.; bricks-and-mortar businesses still suffer. And this effect is amplified by the fact that office workers are still working from home. Businesses that rely on city centre foot traffic will find it difficult to survive.

Finally, each day brings new newspaper headlines of some big multinational company shedding huge numbers of jobs. Partly from necessity, no doubt, but also I'd imagine to an extent many are using CV19 as an excuse to make huge 'efficiency' savings to reduce headcount for the benefit of shareholders.

Crisis always accelerates change, and this is a major crisis. Working patterns and online retail may have changed forever.

There is one serious advantage the US has against the more socialistically-inclined countries - it does this boom-bust cycle every 10 years, give or take. The economy is fairly well-equipped to take a hit and recover. I'm not a big fan of the government meddling in the economy like they did back in 2008 and are trying to do now, but in the grand scheme of things the recovery will be lead by people who know they have to go and take care of their own shit instead of waiting for a handout. The US has no lack of such people. Can't say that about many other countries.

That depends on them not dying of course, which is the one thing the government should be meddling in but it isn't. Go figure...

WOW.  32.9% is no joke, and that's scary to me. 

What I'm hoping is that these numbers temporarily reflect the consequence of the COVID-19 shutdown and that the contraction eases in the upcoming quarters as people start getting back to work.  I also do think that's going to be the case, because I'm seeing my local stores and restaurants reopening--the odd thing is that I'm not seeing a lot of people around in the stores and such.  I'm assuming that might be because people are getting stuff delivered from Amazon and the like. 

So that's the US.  I'm curious as to how the rest of the world is faring in terms of their economies. 

That's true, although I haven't seen many in my area that have closed up shop for good.  But keep in mind that I don't own a car and I generally don't travel too far from home.

Just be weary n the third and fourth quarter when the economy posts the largest quarterly GDP increase in recorded history.  I imagine such a headline would get considerable touting by the current administration despite the fact that it will completely lack all the context of how bad things were and still are.  There will be no quick recovery from this, and it will take years to get back to where we were economically before the pandemic hit, assuming we can even get back there at all.

That's why I compared western countries and not countries that are known for their propaganda or countries which have no resources to even find out the impact of the disease. For example RSA and Egypt are leading the pack in Africa with over 150 deaths/mil in case of South Africa, but that's because they have the means to test and identify, How could a country next to it like Botswana have a death rate of 0.8, 200 times lower?

The western part of EU and the US are near matches, both in cases of testing per million, they have the financial resources, it's pretty hard to cover-up deaths that's why you can compare them, once you chose countries at random like Angola and Mongolia it's pretty obvious there are way too many variables to make it an effective comparison.


https://www.economist.com/graphic-detail/2020/07/15/tracking-covid-19-excess-deaths-across-countries
You can see that the excess reflects a bit the static on deaths, the US is a bit better than France Italy, or Spain but worse than Germany or Denmark.

But the number of deaths will not reflect equally in the economy, and this is why the US although might get out of this far better in terms of victims will end up worse short term economically. Long term I expect the EU to suffer a longer period.


Not really, there are a few exceptions, one example is Turkmenistan where because of their all mighty and powerful and corrupt leader there is no case! 
And there are lot more where wannabe dictators are not doing anything because if you don't test you don't have people suffering or dying from it and it means you're a brilliant leader!

Both the bold text and the not bold texts have different meaning.
For sure their economy will not recover this year since their Fed Chairman said already in an interview that it will take time for their economy to be back on its track. On the other hand, yes Trump has claimed that their economy will bounce back and yes it will like most of the economies but it will take time for it to happen.

With the trend of the cases in US showing no signs of a reversal, its expected that unemployed people there are slowly rising even though there are some establishments that have re-opened. There are still some establishments who are closed permanently or temporarily.

The only chance that I'm seeing and all of us are seeing right now are a vaccine/cure. This is the only hope that I'm seeing right now in order for this virus to be controlled.

Indeed. If governments were interested primarily in the welfare of all of their citizens, then the world would be a very different place. Imagine if all data reported was unbiased truth, and not manipulated or carefully selected.  If everyone was working together, and scrupulously honest, then China would have alerted the world as soon as the first cases started arising in humans... and the rest of the world, instead of staying open and gambling with their people's health in order to not suffer some short-term economic damage, instead decided to quarantine all new entrants... the virus would never have spread.

But we are where we are. Perhaps lessons will be learned and countries will start acting with a bit more maturity from now on. Or perhaps not. At the least, we can hope that certain safeguards will be put in place to stop the same sort of thing happening again, the next time some deadly virus passes to humans.

Well every country that has an active case of covid is trying their very hard to eliminate the virus, to dissolve and to find a vaccine on it, all of us are trying all of medical personnel are doing their job 100% in every sector and comparison these days are unnecessary. We are all hit with this, we should be coordinating to everyone besides the number of covid cases aren't final I'm sure there are people who has the symptoms but is just neglecting to visit a doctor coz they know that hospitals during this time is full of patient. We can't just be announcing anything if we are not testing everyone, who could have known that Europe has a higher cases than US only because not every one is put on the tests.


This is what I'm talking about, so we can't expect that the number of cases is going down or slow down, the more people we tests the more we are going to get results and most likely most of us are just asymptomatic one, which I think is not belong or counted as a active case.

If I remember correctly this crisis has erased the progress made by the US economy of the last 5 years so it is not realistic to expect that everything will be recovered during this or next year, the effects of the pandemic will be felt for years and the worst thing is that this is not over it is possible that the behaviour of people will change and their spending habits change with them and in an economy so dependent on the consumer this could spell doom for many industries during the short and long term.

It's difficult to determine objective truth in both number of cases of CV19 and number of deaths from CV19. Most countries I suspect are trying very hard to ensure they look as good as possible when compared against other countries, and will be adjusting their figures through careful control of who they test and when they test them. And it depends on your metric of comparison, too. 'Number of cases' is hugely variable depending on the extent of testing, and whether it's blanket testing or just people with symptoms. As for 'deaths from CV19' - you can well imagine countries trying very hard to ascribe other reason for death where possible.
Perhaps the best commonly-used figure we can use is excess mortality against the 5 year average, on the basis that whilst governments find it fairly easy to control official 'reason' for death, they find it much more difficult to hide the fact of the death itself.