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, down from -51.2 percent on May 29. After this morning’s Manufacturing ISM Report On Business from the Institute for Supply Management and the construction spending report from the U.S. Census Bureau, the nowcasts of second-quarter real personal consumption expenditures growth and second-quarter real gross private domestic investment growth decreased from -56.5 percent and -61.5 percent, respectively, to -58.1 percent and -62.6 percent, respectively. The nowcast of the contribution of the change in net exports to second-quarter real GDP growth decreased from 0.73 percentage points to 0.43 percentage points.
GDPNow is not an official forecast of the Atlanta Fed. Rather, it is best viewed as a running estimate of real GDP growth based on available data for the current measured quarter. There are no subjective adjustments made to GDPNow. It is only based on the mathematical results of the model. It does not capture the impact of COVID-19 beyond its impact on GDP source data and relevant economic reports that have already been released. It does not anticipate the impact of COVID-19 on forthcoming economic reports beyond the standard internal dynamics of the model.
SOURCES- Federal Reserve Board of Atlanta
Written By Brian Wang.
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
Known for identifying cutting edge technologies, he is currently a Co-Founder of a startup and fundraiser for high potential early-stage companies. He is the Head of Research for Allocations for deep technology investments and an Angel Investor at Space Angels.
A frequent speaker at corporations, he has been a TEDx speaker, a Singularity University speaker and guest at numerous interviews for radio and podcasts. He is open to public speaking and advising engagements.
Based on what was known at the time and at the rate the ICU were filling up the lock down in NYC made sense.
I also have no problem in giving people time to adjust to the situation. BTW, COVID death is now over 100,000. It will be about 500,000 by vaccine time. A bit worse than the flu.
There are remedies like Vitamin D supplements,TB BCG vaccine and plasma for previously infected people. But there doesn’t seem to be much of a push to implement them widely.
Yep, the only changes to my life are wearing a mask sometimes and less traffic on the way to work.
To Andrew Worth et al.:
A -52.8% annualized growth rate in GDP for Q2 means the following holds: [1+ rate(Q2)]^4 = 1 – 0.528, implying that the economy will shrink by about 17.1% in Q2, which is, in a word, catastrophic.
It is likely however that this decline will be offset by equally high growth rates once people go back to work. Likely but not guaranteed and probably won’t offset the decline completely, leading to negative GDP growth for 2020.
Why anyone believes anything the Left espouses anymore is beyond me.
It’s not about the number of Deaths. but the overall change of community/ work culture – what now of transit smushed 20 per 10 square feet soon to be 2; what now of 30 diverse restaurants on main street/ high street becomes 5; what now of 25% less retail, restaurant, and club staff; what now of 15 – 25% working from home for the next year with the reduced productivity; what now of unemployment at 7 – 9% for next 6 – 12 months and taxes up, up, up. Sparse, lonely, work-obsessed -or-not at all, and a faded and fear-divided socialization culture – 2020 – the Year It All Changed.
Poor people are not heroes. Poverty is not noble. You are judged on how you do within the context of your surroundings. If you are not getting clean water then PM2.5 counts don’t matter. There is not enough resources in the World to do the Right thing, much less to giving a ‘helping hand up’ to all those in the less than G20 countries. If there were not more civilized countries to aspire to then many would not even know to protest for change. As with most governments/ leaders/ tyrants, the People, for the most part, get the life they deserve, if not what they are entitled to. Cynicism is Truth. Cynicism is realizing the World is what we have all made it. Just because people live a garbage life doesn’t mean that the World owes them anything. Self-resilience, hyper-individualism, rejection of tribal/ cause/ group values, and a desire to push yourself forward, even at the cost of sacrificing close family ties, friendships, personal time, etc., is what made the top 20% actually improve the overall value of a country within which they reside. Competence first. Community second. Its not what pollution kills that matters, for there are many things worse than death.
Woah – can you say RESILIENCE – the Employers actually want people back!?! I. figured the Pandemic would be the excuse to discard and then not re-hire the ne’er-do-wells, underachievers, etc. etc. The 90% employment Elite worker economy for months-year – but witness the hordes.. per pic attached. Its way down there, but that is steep – that’s months on the X. Its not just a V shape recovery – its a II recovery. Next 3 months will tell.
As usual, most of the “stimulus” spending is going directly to propping up financial institutions. But it’s pretty difficult for the market to drop far for long, with so much of the population having their 401-K programs buying on autopilot.
“Better a poor and clean world –than- a rich and drity world, amirite?”
Are you naive or cynical?
Have you ever lived in a poor country? As a general rule of thumb, the poorer a country is, the dirtier. Poverty kills more than controlled industrial fall out. Look at the average life expectancy in poor countries. My Grandfather told me 60+ years ago: “rather rich and healthy than poor and sick”
Go spend a month or two in a “poor and clean” village in Bangladesh, and after that you go, wash up and relax in Switzerland, and then tell us which country is cleaner.
Or just google the maps that portray information on different forms of pollution.
No mater what the outcome was ever going to be, you were against a lockdown. That just means other people have other priorities than you. Like lives.
If they started dying like flies, you would have said lockdown was pointless. If people stopped dying, you would have said the disease was nothing anyway, and everything was an overreaction.
We needed to flatten the curve. We saw what happened in Wuhan and Italy when it was too much. The lockdown did that. Did they go beyond…maybe. But that just saved more lives.
I would have acted earlier and much more extreme. And you know that is not 20/20 hindsight. Probably would not have needed the lockdown at all, had we worked aggressively from the start.
I don’t buy that it will take years to restore the economy. The things that made the economy work are still in place. We have lost some small businesses, and a few large. Others will take their place. Others were likely on their way out anyway. Small businesses run poorly by the second or third generation, businesses already under pressure by Walmart, Home Depot, Amazon, and Ebay. I know, we lost some good ones. Ones I will miss.
And some good may come of this. Maybe people will take their health more seriously. Eat better. Exercise more. And the efforts made to fight the virus may enhance our skills to fight other viruses. You can bet a lot of bright young minds will go into medical research now. People who otherwise would have become lawyers, and business executives.
people will die of starvation this year because of the lockdown? Guaranteed it will be magnitudes more than the virus has killed.
Looks like 2019 Q2 GDP growth rate, annualized and seasonally adjusted, was 2%. So I guess -52.8% means in 2020 it’s a bit under 1% for Q2.
IF the economy had performed the same last quarter and went on to perform the same the next two quarters, we’d end up a bit under 1% GDP growth for the year. Assuming some recovery by Q4 and that Q1 GDP annualized growth probably was around 2%, we might end up around or under 1.5% GDP growth for 2020.
The Fed designs money supply growth to aim at ~2% inflation, and I don’t think GDP numbers factor out inflation. So 1.5% isn’t keeping up with that, and in effect we’ve got some deflation, as one might expect. At least that’s how I’d interpret it.
Certainly we won’t be seeing further shrinkage, so the actual total gdp growth for the year will be -7% if 3rd quarter doesn’t shrink any further but doesn’t return to normal, and -3.5% if the 3rd quarter goes back to exactly like it was before covid. So probably somewhere between those two numbers.
Oh, ok, yeah, -1.5% is wrong too. So is 1.5%. What the metric is, is what would the gdp outcome be if the current rate of growth for the quarter was the growth over 4 quarters. So if we had 4 quarters in which in each quarter the gdp shrunk by as much as they’re projecting it will in q2 2020, the gdp would shrink by 52.8%. So somewhere around -15% rate of gdp for this quarter.
You didn’t really intend to put a minus in front of the 1.5%, did you? 50% down from +3% would be +1.5%.
So then if growth was 3%, now it’ll be -1.5%. Something along those lines?
Those of us who never really enjoyed interacting with people are doing fine.
I can see that some people are getting a bit bored, but meh…
China will end up saying that they grew, and that’s all that matters to some.
Did that make those neighbourhoods better, or worse?
dude, the moment you said “better a poor and clean world than a rich and dirty one amiright” you lost.
there’s many more potential outcomes
oh the vitriol – my goodness… did some 60-something play the stockmarket and lose like 40% of their worth and then only regain back 40% of that low value, so now they have to work an extra 5 years before retirement. Well, since about 20% of the ‘Greatest Generation’ has died or been seriously disadvantaged from this pandemic, perhaps your Inheritance will come sooner, so you can retire and let this crazy world just play itself out from your Retirement Village in Lakeland, FLA.
From the “the Hurricane Class V before the Dawn (everywhere)”, File:
“…The BEA released their estimate of May vehicle sales – down 29.8% from May 2019. Lowest since records began 1967.…. DOT: Vehicle Miles Driven decreased 18.6% year-over-year in March. Lowest since records began pre-1970s. …the consensus is for 8,250,000 non-farm payroll jobs lost in May. …expenditures on energy goods and services as a percent of total personal consumption reached all-time low of 3.54% (good thing) versus almost 14% during oil crisis late 70s. …I hate to love this stat but: number of Real Estate salesperson’s licenses is off 26% from the peak/ Brokers’ licenses are off 14.7% from the peak. ..” … But!!! air-borne pollution, particulates, PM2.5 counts, aerosol levels ALL Records – Down. Down. Down. Better a poor and clean world –than- a rich and drity world, amirite?
Enjoy your new Chinese overloards that have imprisoned a couple million Muslims just because and have no qualms about hosing down a few thousand of their own civilians for getting a bit uppity.
You got your name right,that’s for certain.
Of course civil disobedience and non-violent protest works. Esp in a free, capitalist society where people can vote with their wallet and vote.
boomers went from protesting the war in Vietnam to taking livelihood away from the lowest on the socioeconomic ladder AS A PRECAUTION against a cold. Same folks took teargas in 1968 – ended segregation, etc., made good music…
Boomers literally brainwashed everybody with an IQ on the southside of 120, and brainwashed half the people with IQs over 120, and took livelihood away from the poor AS A PRECAUTION against THE UNKNOWN.
I still can’t believe it happened and how few people see it. It has really taken my low opinion of the majority and downshifted it.
Some people would say, “well that is why education is so important.” My takeaway is something else: “why bother?”
Everybody like how they threw a space launch in the mix a few days ago? Like it’s the late ’60s all over again. What a joke. “Be proud, USA can put Teutons and WASPs in LEO again – hooray!”
Now, the libs are in control and they keep moving the goalposts. Maybe open restaurants by July maybe won’t open schools next year, maybe stay closed until there’s a vaccine. Everybody remembers that the shutdown was to keep the hospitals from being inundated with patients – never manifested. They just move the goal posts. It’s because the silent majority of boomers like Mark Stewart and my own mother who is still terrified of Amazon delivery box cardboard disease vector still BELIEVE the invisible enemy is out there and they take comfort in the status quo shutdown, which is leading to the cities burning.
I say, burn it until Tom Wolf starts getting hot under the collar, and then burn some more. If I didn’t have so much to lose, I might have been out there with them.
Mark, how is it that i literally KNEW the math was wrong when I first saw Thomas Pueyo’s hammer dance medium article being passed around like good science in mid March? That article was showing UK and US projections that were strikingly similar to the textbook case of point kinetics super prompt critical multiplication in fission reactors – IOW the projections were all BOMBS – without any feedback – and that meant they were FALSE.
Then, SOME of us kept rooting for numbers and then a limited segment of the government and press acknowledged that the models were indeed terribly wrong, but it didn’t matter to the fearful and the socialists – the end had justified the means. We were shut down. Now, we in NJ are still shutdown because 70% of the population thinks it is still right, because they don’t follow the data or understand relative risk, and they never read a microbiology textbook like I did a decade ago like it was a coffee table book – No, they listen to CNN and they didn’t know that we lose 15-30K people to ‘the flu’ every year. Guess they never wondered how the bedridden die – never heard of the ‘Old Man’s Friend’ pneumonia.
The decision saved no lives – it simply delayed their expiration by a few months as typically only the terminally weak succumb to it. You and many others are on the wrong side of this. “Somehow word got out that this [lockdown] is the thing we’re supposed to be doing” -DJT.
You assume that what we didn’t do would have been much better. From what we knew at the start the death rate was 5%. Losing 5% of our population in several months would have destroyed our economy anyway. So, a decision was make to save lives. The result is that many hundreds of thousands of lives were saved. By the way the countries that dealt with COVID best were fast and brutal with their actions. Their economies are now open. The countries like us that wavered are still dying of COVID and their economies are still suffering. Sometimes, we all need to read from the same playbook.
From the report:
“The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2020 is -52.8 percent”
So the rate of growth of GDP is negative by an estimated 50%. That is different than GDP is down 50%.
China abandoned their growth target.
CHY–na
Which developed country apart from Sweden avoided a lockdown?
If you want to say that all the world’s leadership is incompetent then I won’t really protest.
The economy apart from the services economy that involves interacting with people is doing OK.
So GDP is down 60% and yet the markets are up. Uber loses twice the expected and they borrow 900 million at junk bond interest rates and yet they are up another10%. When this truptemkins market is finally priced correctly the markets will be cut 80%.
Everything that really matters is still functioning reasonable well, it never stopped. You should stop crying about the economy and look to navigating your personal situation onto an optimal path.
Never forget, the world doesn’t revolve around what you want and when you want it.
You are wrong!
This report talks about a big negative change in GDP growth, which is a bit different to a big negative change in GDP. Negative 50% change in growth might mean growth of 1.5% instead of 3%, negative 50% change in GDP might mean per capita GDP of $30,000 instead of $60,000.
Anyone care to clarify what the figures actually mean, because as I’m reading the meaning it’s a small deal.
IFR is around 0.26%. Is that worth tanking the economy for?
You are so wrong. Your narrow ideological line of argumentation just shows the narrow ideological mindset abyss that we are in. Smart Measures would have mostly avoided a lock down. The virus is 5-10 more lethal than the flue and maybe twice as infectious. The death numbers already prove that. The health authorities failure goes way beyond testing to include lack of contact testing proper isolation and doing all that in a speedy manner and trying other more creative methods that nobody bothers to try and can help in preventing infections. The market need clear pathways to handle all of that and they simply aren’t there and many of them will always be dealt with a better governance. We simply don’t have anyone in clear oversight and direction.
You are so wrong. Current CDC model shows 5 scenarios with actual rather than model data. Low end is projecting mortality rate of 0.002 and the high end is showing 0.26. More testing will reveal how many have been infected. This is nothing more than a bad flu season and NEVER warranted the economic closure. This country isn’t coming down as you allude. It was the government that caused this economic downturn, not a virus. There’s a difference between being afraid and being in danger. More Americans are in real danger of developing diabetes or heart conditions that will kill them than will die from CV19. They are afraid of CV19. When centralized decisions, as we saw with CDC testing kits, go bad they are HUGE mistakes. The proper response would have been to let the market work out as many testing options as possible, but the Feds said no and screwed it up. You have it all backwards.
Obviously, we haven’t done enough to vanquish the epidemic compared to other countries. We don’t have enough people in power and position to take well thought overall and swift measures nor the mindset. The same principles that made this country so powerful, free market with very little central power, can bring this country down due to over adherence in a time of a national crisis such as this.