The U.S. economy just saw the biggest drop in second quarter GDP in history.
Q2 GDP plummeted 32.9%. Fortunately, it wasn’t as bad as the 34.7% drop economists were expecting. Still, it was pretty bad with contractions in personal consumption, exports, inventories, investment and spending by governments. All thanks to the coronavirus.
According to the Bureau of Economic Analysis:
“The decline in second quarter GDP reflected the response to COVID-19, as “stay-at-home” orders issued in March and April were partially lifted in some areas of the country in May and June, and government pandemic assistance payments were distributed to households and businesses. This led to rapid shifts in activity, as businesses and schools continued remote work and consumers and businesses canceled, restricted, or redirected their spending.”
Not helping, U.S. weekly jobless claims were up.
Roughly in line with estimates, 1.434 million claims were filed in the week ending July 25. That was slightly better than expectations for 1.45 million. According to CNBC, “Continuing claims — which are composed of those receiving unemployment benefits for at least two straight weeks — rose by 867,000 to 17.018 million.”
Unfortunately, Congress isn’t close to helping those out of work.
“We’re nowhere close to a deal,” said White House chief of staff Mark Meadows after a meeting with Steven Mnuchin, Nancy Pelosi, and Chuck Schumer.
“Senate Republicans released a roughly $1 trillion pandemic aid bill this week, a counter to the $3 trillion package House Democrats passed in May. But the proposal has not earned the support of many GOP lawmakers, let alone Democrats,” said CNBC.