STR8 UP FACTS:
- Those of us that read finance news regularly were slammed with doom and gloom headlines suggesting that US GDP plunged by 33% in the 2nd quarter. That is scary, but don’t listen to the headlines. The real decline in Q2 2020 is 9.5%. That’s still the worst in nearly 70 years of quarterly data but we did shut down the entire country… are we really all that surprised?
- Relatively good news: The Atlanta Federal Reserve Bank GDPNow model is currently estimating 20.5% (seasonally adjusted annual rate) real growth in Q3 GDP.
- Last Thursday, the Bureau of Labor Statistics released that 1.2m initial jobless unemployment claims were filed in the week prior. So far, we are at 20 straight weeks where unemployment claims have been higher than the worst weeks of the 2008-2009 recession.
- Last Friday, the Bureau of Labor Statistics released the July official unemployment rate as 10.2%, down from 11.1% in June. At the same time, the data shows that the jobs market slowed in July. Keep in mind that the Great Recession peaked at a 10% unemployment rate. Unofficially, the unemployment rate is likely a few percentage points higher than reported.
Other interesting economic data:
- The US personal savings rate is up substantially from 7% average to as high as 33.5% in April to 19% in June 2020. Not completely surprising, but some of this has to do with various stimulus efforts as well.
- Government transfer payments (pretty much all the stimulus) is at an all time high. As a result, personal incomes have actually increased by 7.6% year over year as of June 2020 during this recession. This is pretty much unheard of as incomes typically decline during a recession. Thank ya, government.
- OpenTable publishes a daily report on the state of the restaurant industry, drawing on its significant data sets. As expected, seated diners are still way down in the US but we have seen a consistent recovery here since the beginning of June 2020 when seated diners were down nearly 81%. In some other countries that controlled the pandemic early on, they’ve recovered and then some.
- Google Mobility publishes regular reports on COVID19 mobility drawing on its vast user data (both historical and real time). Yeah, not a fan of the privacy part but hey, at least we have the data.
Latest Google Mobility Report for the US
BOTTOM LINE: The US economy is resilient, even in the face of our pandemic and growing divide. The last few months are evidence of American ingenuity (as well as ignorance that is costing us). One of the biggest issues we face today is all the seriously conflicting data like a declining employment rate, yet the second highest week of Americans receiving unemployment. The data is concerning and there is serious questions and likely pain ahead, but first we really need to bring this pandemic back in control in the states. Maybe the bottom line is actually… consider wearing a mask to save your economy and the American people faster.
Better yet, get a free mask on us. Refer 5 friends to our newsletter and we’ll send you a mask, free. Yes, free with 5 strings attached.