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3 Months Of Hell: U.S. Economy Drops 32.9% In Worst GDP Report Ever

3 Months Of Hell: U.S. Economy Drops 32.9% In Worst GDP Report Ever thumbnail

The coronavirus pandemic triggered the sharpest economic contraction in modern American history, the Commerce Department reported Thursday.

Gross domestic product — the broadest measure of economic activity — shrank at an annual rate of 32.9% in the second quarter as restaurants and retailers closed their doors in a desperate effort to slow the spread of the virus, which has killed more than 150,000 people in the U.S.

The economic shock in April, May and June was more than three times as sharp as the previous record — 10% in 1958 — and nearly four times the worst quarter during the Great Recession.

“Horrific,” said Nariman Behravesh, chief economist at IHS Markit. “We’ve never seen anything quite like it.”

Another 1.43 million people filed for state unemployment last week, an increase of 12,000, the Labor Department reported Thursday. It was the second week in a row of increased unemployment filings and shows that the economic picture continues to remain grim.

GDP swings are typically reported at an annual rate — as if they were to continue for a full year — which can be misleading in a volatile period like this. The overall economy in the second quarter was 9.5% smaller than during the same period a year ago.

After a sharp drop in March and April, economic activity began to rebound in May and June, although that recovery remains halting and could be jeopardized by a new surge of infections.

“As soon as the virus started to take off again in key states like Texas, California, Arizona, Florida, it’s fading very rapidly,” Behravesh said.

Restaurant owner Cameron Mitchell likens the pandemic to a hurricane. What appeared to be a business rebound in June turned out to be merely the eye of the storm, and he’s now being buffeted by gale-force winds again.

“Our associates are more scared to work today and guests are more afraid to go out, so sales have dropped,” Mitchell said.

Cameron Mitchell operates more than 50 restaurants in 13 states. He says business was rebounding in June but has dropped again with the surge in new coronavirus infections.

Cameron Mitchell Restaurants

Business at his restaurants in Florida had nearly recovered to pre-pandemic levels in June but has since fallen sharply.

Other industries have enjoyed a more durable recovery, though few are back to where they were in February.

Dentists’ offices are ordinarily one of the more stable parts of the economy, but they closed for all but emergency services during much of the spring. Dental hygienist Alexis Bailey was out of work for 10 weeks before her office in Lansing, Mich., reopened at the end of May.

At first, she was reluctant to go back to work while the virus was still circulating.

“I was terrified,” Bailey said. “I was not happy to be back. But I have a job to do and I like to do it and I want to help people. We talk about how essential we are, so that’s what we’ve had to do.”

Dental hygienist Alexis Bailey was initially nervous about returning to work but says she quickly grew comfortable with the new protective measures, including a face shield (not shown).

Christina Dauka, MSDH

Within an hour of returning to work, Bailey said, she began to feel comfortable, particularly with the additional protective gear and other safety precautions her office has adopted.

“I tell my patients all the time I wouldn’t be here if I didn’t feel safe,” she said.

Nationwide, dental offices added more than a quarter-million jobs in May and another 190,000 in June. And there has been no shortage of patients.

She thought no one would want to come. “But we’re booked,” Bailey said. “People miss getting their teeth cleaned. They want to catch up. Every time they come in, they say, ‘This has been nice to get out of the house and feel safe and talk to somebody.’ ”

Factory production has also begun to rebound, along with construction. But airlines and amusement parks are still struggling.

“It’s very much a sort of two-tiered economy right now,” Behravesh said.

The unemployment rate approached 15% in April, and in June it was still higher — at 11.1% — than during any previous postwar recession.

While the drop in GDP was largely driven by a decline in consumer spending, the economic fallout was cushioned somewhat by an unprecedented level of federal relief.

Wages and salaries fell sharply in April, but that was more than offset by the $1,200 relief payments that the government sent to most adults and by supplemental unemployment benefits of $600 per week.

Those government payments helped prevent an even steeper drop in consumer spending — the lifeblood of the U.S. economy — and allowed struggling families to buy groceries and pay rent.

Federal Reserve Chair Jerome Powell said Wednesday that the money “has been well spent. It has kept people in their homes. It has kept businesses in business. So that’s all a good thing.”

Those extra unemployment benefits are expiring this week, though. With coronavirus infections still threatening the recovery, additional federal support is likely to be necessary.

“Until we get the virus under control, we’re going to need more help,” Behravesh said. “Our view is that we’re not going to get to the pre-pandemic levels of economic activity until some time in 2022.”

Restaurant owner Mitchell says his business lost $700,000 in June alone. He predicts a wave of restaurant bankruptcies unless the federal government provides more relief.

“No one is looking for a handout here,” he said. “We’re looking to survive.”

He’s watching news of vaccine trials closely in hopes that eventually diners will feel comfortable eating out again in large numbers.

“I don’t think it’s the next couple of weeks,” he said. “But I tell our team, ‘Every day that goes by, it’s one day closer to the end of this thing.’ ”


68 Comments on "3 Months Of Hell: U.S. Economy Drops 32.9% In Worst GDP Report Ever"

  1. Abraham van Helsing on Sun, 2nd Aug 2020 4:59 am 

    Nike, the #1 globalist propaganda mill:

    “Is it still about the shoes? Nike’s latest ad builds on the company’s tradition of slickly-edited propaganda & hypocrisy”

    Has no doubt something to do with the popularity of Nike’s products with a certain demographic (no, not Jews).

    For global corporations, national identity doesn’t exist, only consumer base and share holder’s value.

    Capitalism, that fine Dutch invention, is a functioning economic system, but it needs to be reigned in and subordinated to national interests. And billionaires need to go. 20-50 million net wort per person should be the max. Successful entrepreneurs should be able to buy a splendid yacht and a 2nd home on the Bahamas, but not entire democracies.

  2. zero juan on Sun, 2nd Aug 2020 5:11 am 

    more nonsense from the lunatic:

    bochen777 said Mak, Well Microsoft bought TikTok, and just releas…

    bochen777 said USA has a lot of hidden advantages too.. you know…

    across the world government leaders are saying happy muzzying while mass horrific slaughter of animals happen said and PETA is silent a couple of decades ago there w…

    REAL Green said So true bochen777. So true. Widdle Davies real stu…

    bochen777 said ^ | Bitch please, I’ve been on PO since the…

    zero juan said Another example of dumbass juanPPee using socks on…

    bochen777 said The American system, as it currently is, was alway…

    bochen777 said The US government has awakened to that reality and…

  3. Abraham van Helsing on Sun, 2nd Aug 2020 5:18 am 

    Trump-2016: “wouldn’t it be great if we get along with Russia?”

    CNN smells a rat, they should:

    “Trump’s Germany troops pullout may be his last gift to Putin before the election”

    Is it really to “punish Germany”, or is he dismembering the empire before the globalist deep state possibly returns?

    It is true that Trump wants Germany to increase its defense spending, but not necessarily to the benefit of the empire, he wants to get rid of.

  4. Abraham van Helsing on Sun, 2nd Aug 2020 5:24 am 

    Here a smart African-American, who realizes he is being setup to become citizen of Haiti-2.0 (Atlanta and surroundings) “after the break”, and doesn’t like it one bit:

    “Charles Barkley says ‘don’t kneel’ & Twitter erupts, proving black people aren’t allowed to think independently”

    There are not enough Barkley’s though to bark against the George Soros and BLM-tree.

  5. Davy on Sun, 2nd Aug 2020 5:26 am 

    Dumbcan’s leftist madness:

    “Car Theft Hits Record High In Los Angeles”

    “A COVID-19-induced recession, with exceptionally high unemployment in Los Angeles, has resulted in record-high auto thefts in 2Q20. A new report via Crosstown LA, who examined the Los Angeles Police Department (LAPD) data, reveals that 5,744 vehicle thefts occurred between April and June, up 57.7% from the same period last year…A tick up in crime is common during deep economic downturns. Months of lockdowns made vehicles susceptible to break-ins. Crosstown also said the California Judicial Council’s passing of a new zero-dollar bail policy was another contributing factor to the surge in thefts, which meant most non-violent crimes had no bail requirements as a way to mitigate the spread of the virus in jails. “People are seeing that they’re not going to stay in jail, especially for car theft,” said LAPD Lieutenant Siage Hosea, who works on the Task Force for Regional Auto theft Protection. “So what’s happening is we are seeing repeat offenders.” Crosstown describes, in one instance, a man was arrested three times in one day for stealing a car. Hosea said criminals were stealing cars during the lockdowns for transportation. “People are just using them for transportation. They’re taking one car here, and then drive over there,” he said. “Like an Uber.” What could lead to even more car thefts this year is the Los Angeles City Council recently defunding the LAPD to the tune of $150 million. Fewer patrols in the liberal city could mean more crime, forcing some residents to flee to the suburbs.”

  6. Davy on Sun, 2nd Aug 2020 5:30 am 

    Dumbcan’s left:

    “Individuals With A Cervix” – Women Reduced To Body-Parts Under Transgender Orthodoxy”

    “Transgenderism has a way of penalizing women, and it’s not just from the entry of biological men into the realm of women’s sports. Suddenly, women are being reduced to body parts, commodified, based on the strange contortions of recognizing men with body dysmorphia as actual women, and vice versa. To accomodate this small group of people, women are being reduced to spare parts. Here’s what the Daily Mail reports: The American Cancer Society has been slammed for using the phrase ‘individuals with a cervix’ in its latest pap screening advice, rather than women. Cervical cancer screening is now recommended to start at 25, instead of 21, and HPV testing should begin at 25 rather than 30. But in updating its advice, the ACS used ‘individuals with a cervix’, rather than ‘women’ in their guidance, because transgender, non-binary and gender-nonconforming individuals can also have a cervix. “

  7. Davy on Sun, 2nd Aug 2020 5:45 am 

    more Dumbcan left insanity:

    “Peaceful Riots”? Journalism Bows To The Woke Mob”

    “Indeed, the media’s commitment to tempering their descriptions of violent riots sweeping the nation as “mostly peaceful” is relentless – that particular phrase has become a media cliché practically overnight. Of course, America’s police officers could also be accurately described as “mostly peaceful,” but any journalist who dared to give cops the same generous benefit of the doubt would likely cause a riot in their own newsroom…the media have spent weeks going out of their way to portray rioters as unambiguous freedom fighters…Naturally, the big beneficiaries of this one-sided media narrative about riots are Democratic Party politicians. On Wednesday, acting Secretary of Homeland Security Chad Wolf announced that the federal government had reached a deal with the city of Portland to downsize the federal law enforcement presence at the courthouse that was clashing with protesters. However, Wolf’s statement made it clear that the deal was contingent on the city stepping up its own police presence to protect the building, which was all the federal government had asked the city to do months ago. Rather than admit the deal was a tacit acknowledgement Portland had failed its basic responsibility to maintain law and order, Oregon Gov. Kate Brown pretended it was a victory against jackbooted feds who “acted as an occupying force and brought violence.” But Brown’s rhetoric is dishonest, as she knows better than most. There were nightly riots for weeks before the feds arrived in downtown Portland. Along with Minneapolis and Seattle, Portland holds the dubious distinction of being a city that has failed to protect its own buildings. Rioters had already burned the Multnomah County Justice Center jail and the Portland Police Bureau headquarters, just a few blocks away from the federal courthouse. Speaking as an Oregonian and former resident of Portland, I’ll note that the city’s problems go far beyond the recent riots. Business leaders have been begging City Hall to address law and order issues for years. In 2017, the CEO of Columbia Sportswear, one of Oregon’s most beloved companies, wrote a blistering op-ed about the city’s problems…Anyone who has spent time in Portland comes to understand the mutually beneficial relationship between the homeless and itinerant gutter-punks who are the main source of the city’s crime and violence and the left-wing activists whose radical agenda of decriminalization lets them control the streets. After police responded to Boyle’s plea to keep excrement out of the doorway of his business, Boyle found himself on the receiving end of organized protests, forcing him to shut down Columbia’s flagship store downtown. The city has also been capitulating to threats of left-wing political violence for years. Also in 2017, Portland canceled its annual Rose parade after “anti-fascists” threatened violence because members of the Multnomah County Republican Party were among the many civic groups slated to march. It’s one thing to claim that violence is justified against unwanted federal officers invading your city – but threatening local residents with violence because they are Republicans?”

  8. Davy on Sun, 2nd Aug 2020 6:04 am 

    More Dumbcan’s insanity:

    “The Nuclear Family Was a Mistake”
    “The Miseducation of the American Boy”

  9. Abraham van Helsing on Sun, 2nd Aug 2020 10:20 am 

    Finally a sense of realism entering the MSM:

    “Sociology professor calls for a ‘sense of proportion’ as he brands Covid-19 a ‘nasty infection’ that ‘simply brought deaths forward by a few weeks’”

    It should be a law that every time media refer to death toll, they are obliged to mention the average age of the people who died and compare that to general life expectancy. Won’t be much difference.

  10. REAL Green on Sun, 2nd Aug 2020 10:43 am 

    Are gdp dropped by 32.9 Davy. That’s REAL Bad. Seeing how bad we fucked up ciavirus. And how much we’all Hate each other now. Betcha it gets way worse then just 32.9

  11. Abraham van Helsing on Sun, 2nd Aug 2020 10:54 am 

    An Asian observer Linh Dinh of the US of many years chimes in with Richard Heinberg, Fred Reed, Kunstler and many others:

    Balkans Ahead! – LINH DINH

    When Tracy returns to the US, she’ll buy a van and travel the country.

    “But the country is no longer the same,” I said to her. It will only get worse, and perhaps not even safe for someone like Tracy to be cruising around. A bloody balkanization lurks… Balkanizing, Americans can look here for warnings and inspiration. Five hundred years from now, a Serbian nation will still exist.

    Won’t be different for European America.
    Yankee republic coming up, decorated with the Confederate flag.

  12. bochen777 on Sun, 2nd Aug 2020 11:04 am 

    China’s new Century of Humiliation has started:

    How The White House Helped U.S. Investors To Raid A Chinese Company

  13. Abraham van Helsing on Sun, 2nd Aug 2020 11:45 am 

    “China’s new Century of Humiliation has started”

    I know who is this time going to be humiliated.

    Hint: it ain’t the Chinese.

    Pepe Escobar: “The Heart of the Matter in the South China Sea”

    Anything that moves in the South China Sea – China’s crucial maritime trade artery – is at the mercy of the PLA, which decides if and when to deploy their deadly DF-21D and DF-26 “carrier killer” missiles. There’s absolutely no way the US Pacific Fleet can win a shooting war in the South China Sea…

    Which brings us to the crucial point of why China is so sensitive about its borders; because they are directly linked to the “century of humiliation” – when internal Chinese corruption and weakness allowed Western “barbarians” to take possession of Chinese land.

    So what about the US notion of “freedom of navigation”?

    In imperial terms, “freedom of navigation”, from the West Coast of the US to Asia – through the Pacific, the South China Sea, the Malacca Strait and the Indian Ocean – is strictly an issue of military strategy.

    The US Navy simply cannot imagine dealing with maritime exclusion zones – or having to demand an “authorization” every time they need to cross them. In this case the Empire of Bases would lose “access” to its own bases.

    This is compounded with trademark Pentagon paranoia, gaming a situation where a “hostile power” – namely China – decides to block global trade. The premise in itself is ludicrous, because the South China Sea is the premier, vital maritime artery for China’s globalized economy…

    Yet “freedom” was never the issue. In imperial terminology, “freedom” means that China must obey and keep the South China Sea open to the US Navy. Well, that’s possible, but you gotta behave. That’ll be the day when the US Navy is “denied” the South China Sea. You don’t need to be Mahan to know that’ll mean the imperial end of ruling the seven seas.

  14. Nutters on Sun, 2nd Aug 2020 12:47 pm 


  15. Davy on Sun, 2nd Aug 2020 12:57 pm 

    JuanP on Sun, 2nd Aug 2020 10:43 am
    “Are gdp dropped by 32.9 Davy. That’s REAL Bad. Seeing how bad we fucked up ciavirus. And how much we’all Hate each other now. Betcha it gets way worse then just 32.9”

    JuanP, why not try to speak like a normal person. You just make yourself look like the high school drop out you are mixed with mental illness. What a Fucknut!

  16. REAL Green Hypocrite on Sun, 2nd Aug 2020 11:54 pm 

    Dear DavySkum,

    You are the loudest and most obnoxious complainer of all. All you do is whine and point fingers.

    It was YOUR stupidity that elected Trump. Now you are busily trying to find scapegoats in an effort to deflect attention away from your political stupidity.

  17. Missouri Leads Nation new COBID Infections on Mon, 3rd Aug 2020 12:01 am 

    DavySkum’s Trump/RepubliCON madness:

    “Missouri leads the nation in new COVID infections due to the state’s pro-Trump Republican establishment threw caution to the wind and opened up way too early and without a plan.”

  18. Davy on Mon, 3rd Aug 2020 4:44 am 

    JuanP on Mon, 3rd Aug 2020 12:01 am

    “Missouri Leads Nation new COBID Infections”

    No infections in my county reported. I am sure glad I don’t live in Miami Beach!

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