U.S. Economic Growth Plunges In Second Quarter
- The U.S. economy contracted at a 32.9 percent annualized rate in the second quarter of 2020 as the coronavirus pandemic shut down large parts of the nation’s economy. It was the worst quarterly GDP reading in history, and well-outpaced the worst quarter of the Great Recession (the fourth quarter of 2008, when growth contracted at an 8.4 percent annualized rate).
- Labor productivity in the United States rose 5.3 percent in retail trade and 0.4 percent in wholesale trade in 2019 while compensation costs for civilian workers increased 0.5 percent for the three-month period ending in June 2020.
- According to the Federal Reserve Bank of Dallas, Texas factory activity continued to expand in July following a record contraction in the spring. The bank’s production index, a key measure of state manufacturing conditions, inched up from 13.6 to 16.1, suggesting a slight pickup in the pace of output growth. Other measures of manufacturing activity, including new orders, shipments, and capacity utilization, also pointed to slightly accelerating growth this month.
- The Federal Reserve Bank of Richmond announced that its manufacturing survey showed signs of recovery in July. The bank’s composite index rose from 0 in June to 10 in July, its first positive reading since March. The indexes for shipments and new orders suggested expansion, while the third component index, employment, remained slightly negative.
- According to the U.S. Department of Labor, in the week ending July 25, the advance figure for seasonally adjusted initial unemployment claims was 1.434 million, an increase of 12,000 from the previous week’s revised level. The four-week moving average also increased.
- In other economic news: the University of Michigan’s consumer sentiment reading fell to 72.5 in July from 78.1 in June; personal incomes in the United States declined 1.1 percent in June 2020; U.S. consumer consumption increased 5.6 percent after rising 8.5 percent in May, but is still nearly seven percent below where it was in February, before the COVID-19 pandemic.