The Bureau of Economic Analysis today released its second-quarter GDP estimates, and the data illustrates a stunning 32.9%, one-third plunge in the United States GDP. It’s the worst GDP report in history—far surpassing last quarter’s 5% dip, and more than triple the previous worst-ever drop of 10% in 1958.
The data reflects the reality of the past few months, as coronavirus cases have resurged, stores have continued to shutter, and citizens have continued to stay at home and save their dollars. According to the bureau, the decrease in GDP was driven by a 34.6% decline in consumer spending, as people purchased fewer services in healthcare, tourism, and travel, and fewer goods such as clothing and footwear. The data also showed drops in consumer investment on single-family housing and transportation equipment, and a drop in business inventory investment from retail companies such as motor vehicle dealers.
The GDP was propped up, however, by federal spending, including forgivable loans that helped small businesses retain workers, and a $600-weekly boost to state unemployment benefits.
The numbers weigh in just under economists’ forecasts for the second quarter GDP, which they had put at a 34.8% decrease. And it confirms comments earlier this week from Federal Reserve Chairman Jerome Powell, who called the current economic crisis “the most severe in our lifetimes.”
“It will take a while to get back to the levels of economic activity and employment that prevailed at the beginning of this year, and it will take continued support from both monetary and fiscal policy to achieve that,” Powell warned in a news conference.
But one person who doesn’t have time to wait is President Donald Trump, whose odds of reelection are likely plummeting right alongside the U.S. economy as November draws near.
Minutes after the GDP report was released, the president tweeted a call to delay the election—something experts point out he has no legal authority to do—until the pandemic recedes.
With Universal Mail-In Voting (not Absentee Voting, which is good), 2020 will be the most INACCURATE & FRAUDULENT Election in history. It will be a great embarrassment to the USA. Delay the Election until people can properly, securely and safely vote???
— Donald J. Trump (@realDonaldTrump) July 30, 2020
The tweet argues that the election should be delayed until voters can get to the polls in-person, to prevent mail-in voter fraud, which analysts have said happens at a rate of roughly 0.0025%. However, Trump’s critics have noted the timing of his tweet and suspect the call could distract news cycles and the public from focusing on the state of the economy.
Just in case you got distracted, here it is: The state of the economy is poor, and it’s looking like it could be a long road to recovery.