IN THIS ISSUE:
1. US Economy Suffered Record Losses in First Half 2020
2. August Jobs Report Came in Much Better Than Expected
3. Business Bankruptcies Jumped 26% in First Half 2020
4. Trump Boat Parades Across the Country on Saturday
As we are all painfully aware, the US economy suffered its worst economic loss in history in the second quarter, with Gross Domestic Product plunging almost 32% (annual rate). That followed a loss of 5% (annual rate) in the first quarter. The US economy has never before seen its annualized growth rate slow this much in such a short time, not even in the Great Depression.
Over 22 million Americans lost their jobs or were furloughed in the 2Q, due to the lockdown of the “non-essential” economy. Fortunately, about half of these workers have now gone back to their old jobs or found new ones.
Most forecasters believe the US economy is roaring back in the 3Q and will continue to expand strongly in the 4Q as well. Most believe we will see above-trend growth in Gross Domestic Product at least through the 1Q of next year. Some forecasters conclude that if GDP grows as the average of forecasts suggest, the economy will be fully recovered by the end of the 1Q of next year.
Unfortunately, that logic is wrong, as I will explain below. The truth is, the US economy will have to grow much faster than is currently forecast in order to fully recover from the disaster we experienced in the first half of this year. I’ll break down the latest numbers for you as we go along.
Following that discussion, we’ll take a look at last Friday’s better than expected jobs report for August. After that, we will look at the latest numbers on business bankruptcies which are continuing to skyrocket. I have some particularly alarming bankruptcy numbers for New York State you should definitely see. Let’s get started.
US Economy Suffered Record Losses in First Half 2020
According to the Commerce Department, US Gross Domestic Product declined by an annual rate of 5% in the 1Q, followed by the stunning plunge of 31.7% annualized in the 2Q when much of the economy was in lockdown. The decline of 31.7% was the worst quarterly reading in our nation’s history, including during the Great Depression.