GDP is projected to fall by nearly 53% in the second quarter, according to a Fed gauge

[Yo_Mama_Been_Loggin]

Source: CNBC

Economic activity in the second quarter has been cut by more than half, according to a tracker employed by the Atlanta Federal Reserve.

The GDPNow outlook is now showing a 52.8% tumble, following data Monday that manufacturing in the U.S. remains firmly in decline and will weigh on investment and consumption. That data from the Institute for Supply Manufacturing showed just 43.1% of firms seeing expansion in May.

Extrapolating from that data, the Atlanta Fed anticipates personal consumption expenditures, which make up 68% of the nation's gross domestic product to fall 58.1% in the April-to-June period. Gross private domestic investment, which accounts for 17% of GDP, is now projected to slide 62.6%.

The GDPNow reading undergoes regular revisions and generally is more accurate as it gets closer to the end of the quarter, which in this case is June 30. The New York Fed's GDP Nowcast, which was last updated before the ISM release, estimates a 35.5% Q2 drop, while CNBC's Rapid Update survey of leading economists has a median 38% decline.

Read more: https://www.msn.com/en-us/money/markets/gdp-is-projected-to-fall-by-nearly-53percent-in-the-second-quarter-according-to-a-fed-gauge/ar-BB14VfGy?li=BBnbfcN

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Heckuva job Trumpy

[Doodley]

1. But the economy is going to be "tremendous" next year, the best the world has ever known.

[keithbvadu2]

2. MAGAts, don't be afraid to brag 'the Trump economy'.

[Roc2020]

3. the consumer economy was a timebomb

waiting to explode. and it has. printing more money is not the solution. the country is in dire straits.

[cstanleytech]

5. Its nothing though that cannot be fixed with good people which rules out the Republicans.

Won't be easy of course but it can be done.

[Miguelito Loveless]

6. Well, certainly not printing more money and giving

it to people already drowning in money.

[Roc2020]

10. yes would be great if the feds

at least stop giving it to folks that already has enough to use as toilet paper would be an awesome start.

[LudwigPastorius]

4. On the bright side,...

body bag and tear gas manufacturer's stocks are through the roof!

/s

[progree]

7. seasonally adjusted ANNUAL RATE

Last edited Tue Jun 2, 2020, 05:09 PM - Edit history (1)

https://www.frbatlanta.org/cqer/research/gdpnow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2020 is -52.8 percent on June 1

It's still horrible of course. That means that the actual drop over the quarter is about 1/4 of that, or about -13.2%, and that if that continued for 4 quarters, it would be 13.2*4 = 52.8% drop. If it dropped that much over a year, that would leave GDP at only 100%-52.8% = 47.2% of its year-before level.

Fancier and more correct math: these are compounded, so it's more like a 17.1% drop over the quarter. Leaving the GDP at the end of the quarter at 100%-17.1% = 82.9% of the level that it was at the beginning of the quarter. Four quarters of a drop like this would leave 0.829^4 = 0.472 = 47.2% left, i.e. the GDP would be at 47.2% of the level it was a year before.

That 17.1% drop over the quarter is easily enough to wipe out the piddling gains in GDP over the Trump 3 years, and wipe out much of Obama's as well. It will take the real GDP level down to just above the Q1 2011 level (and below the Q2 2011):

https://fred.stlouisfed.org/series/GDPC1

(best to pick the "10Y" (10 year) view)

82.9% * 18,975 = 15,730

Wiping out 9 years of real GDP growth in just one quarter.

Still above the best level of the Bush II (and I) administrations. Good job Trumpy boy!

[Steelrolled]

8. This is what must have driven the stock market up today DJIA +267

[progree]

9. Maybe. I thought Jesus was pleased to see Trump holding up a Bible in front of St John's

and gave the stock market another upward kick (Jesus wants all the good people to be be rich u know).