Over 1.4 Million Filed Unemployment Claims, GDP Dropped 9.5% in Second Quarter
This is what happens when you shut down the economy.
About 1.434 million Americans filed unemployment claims last week as states issue another shutdown due to spikes in coronavirus cases.
The GDP also crashed to a 32.9% annualized rate, which is the biggest drop on record. Overall, the GDP dropped 9.5% between the first and second quarters.
But we have to remember the GDP report contains numbers between March and June. It doesn’t tell us what is happening now or tomorrow.
From the Labor Department:
In the week ending July 25, the advance figure for seasonally adjusted initial claims was 1,434,000, an increase of 12,000 from the previous week’s revised level. The previous week’s level was revised up by 6,000 from 1,416,000 to 1,422,000. The 4-week moving average was 1,368,500, an increase of 6,500 from the previous week’s revised average. The previous week’s average was revised up by 1,750 from 1,360,250 to 1,362,000.
The advance seasonally adjusted insured unemployment rate was 11.6 percent for the week ending July 18, an increase of 0.5 percentage point from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending July 18 was 17,018,000, an increase of 867,000 from the previous week’s revised level. The previous week’s level was revised down by 46,000 from 16,197,000 to 16,151,000. The 4-week moving average was 17,058,250, a decrease of 435,500 from the previous week’s revised average. The previous week’s average was revised down by 11,500 from 17,505,250 to 17,493,750.
As you can tell the continuing claims went up slightly after continuous drops.
The pandemic also affected the GDP, which dropped by 9.5%:
Gross domestic product — the broadest measure of goods and services produced — fell 9.5 percent in the second quarter of the year, the Commerce Department said Thursday. On an annualized basis, the standard way of reporting quarterly economic data, G.D.P. fell at a rate of 32.9 percent.
The media will concentrate on the 32.9% annualized rate. Technically, it’s not misleading because it is true. The government “always ‘annualizes’ the quarterly GDP figures — meaning the number assumes the pace the economy grew or shrunk last quarter will continue over the year.”
People stopped spending:
Sharp contractions in personal consumption, exports, inventories, investment and spending by state and local governments all converged to bring down GDP, which is the combined tally of all goods and services produced during the period.
Spending slid in health care and goods such as clothing and footwear. Inventory investment drops were led by motor vehicle dealers, while equipment spending and new family housing took hits when it came to investment.
Prices for domestic purchases, a key inflation indicator, fell 1.5% for the period, compared to a 1.4% increase in the first quarter when GDP fell 5%, The personal consumption expenditures price index dropped 1.9% after rising a tepid 1.3% in Q1. Excluding food and energy, the “core” PCE prices were off 1.1%.
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Comments
On its face, it looks terrible. However, under the regime, they never had that kind of growth. 1.6% GDP final quarter
But if destroying the economy keeps just one American from contracting COVID, it’s worth it! /sarc
The dems played their hand too soon. If they had waited 4 months to start their COVID panic strategy, they might have a chance. Now people are Just. Done. And any play to close the economy again is and will continue to be ignored by hard working Americans.
So, the domestic economy continues to shrink even more. People have ti understand that that the economy is like a living thing. And, it has been tremendously injured. It will take time to recover. But, in order to recover, it requires that the traumatic injury ceases. And, that is not being allowed to happen.
In the first place, the Global economy has been shutdown for the last quarter, three full months. That means that there is no foreign market available to stimulate domestic economic growth.
In the second place, most of the US domestic consumer economy has been shut down and remains either shutdown or severely restricted by government edicts. The official unemployment numbers are at 12%. But, the true unemployment number is at least 20%. And, it is increasing.
Third, the small business failure rate, due to the shutdown, is extremely high and will rise even higher, as sales and service industry job numbers remain low. The large, established business failure rate is increasing, as well, as more businesses file for bankruptcy.
Fourth, suppliers are facing huge problems as shuttered businesses have nit been making regular purchases. Add to that the amount of accounts which are in arrears and will never be recovered and that segment iif the economy is in dire straights, as well.
Fifth, the effect on financial and real estate interests is increasing as the inability of workers and businesses to meet their loan, rental and mortgage payments begins, continues and/or increases.
Finally, we have the effect of unsecured government borrowing, or simply printing money which it does not have, will have on the economy. Debt is still debt. Someone has to pay for the free lunch, sooner or later. And this debt will have a negative effect on economic recovery.
And, still, the stupid sheeple of this country allow it to continue. They may as well hold a gun to their own heads and heads of their children and pull the trigger.
Anyone old enough to remember the 1992 presidential election? The big issues then were “the worst economy since the Great Depression”, widespread homelessness, and “crumbling roads and bridges”. But literally within 24 hours after William Jefferson Clinton won, all of these issues magically vanished from the Joseph Goebbels media as though they never existed. Instead, the incoming Clinton regime focused on “universal health care, an issue that was barely discussed during the campaign.
Get ready for current national woes (real and imagined) to undergo a similar magical disappearing act should the Communists seize power this time.