Midsummer 2020 will forever be known as a historic time for U.S. economic data releases. On this date, July 30th, the Bureau of Economic Analysis (BEA) has published its estimate of Q2 versus Q1 gross domestic product (GDP) change, annualized (i.e., extended for a full year), and it’s a searing drop of -32.9%.
Dealing with the coronavirus outbreak has exacted a terrible toll. Over the past four months, one-third of the U.S. labor force has been laid off, furloughed, or suffered drastic reductions in pay and hours worked. And now it’s been revealed that national output was cut by one-third from April-June versus January-March. Not to be forgotten, January-March 2020 relative to October-December 2019 was also in the red, -5.0%.
The most dramatic changes in GDP line items in the BEA’s ‘Advance Estimate’ report for Q2 2020 were as follows: ‘personal consumption expenditures,’ -34.6% q/q annualized; consumer expenditures on services, -43.5%; investment in nonresidential structures, -34.9%; investment in residential structures, -38.7%; exports of goods and services, -64.1%; imports of goods and services, -53.4%; and ‘final sales of domestic product,’ which omits the negative effects of the foreign trade shortfall, -29.3%.
From the investment figures above, it’s apparent that construction activity did not escape unscathed despite having the advantage of being judged ‘essential’ and allowed to proceed nearly everywhere in America, while other sectors were in lockdown.
