“The obvious caveat is that when you drop 30 percent and gain 30 percent, you’re still below where you started,” said one analyst.
The GDP numbers appear quite remarkable but in the last quarter, the GDP fell to a record low of -31.7 percent. We’re rebounding not growing.
“It’s easier to get big growth rates when you’re coming off a lower base. That’s what a lot of this is,” said Dan North, senior economist at Euler Hermes North America.
The strong GDP figure also camouflages the K-shaped nature of the recovery that has caused economic sectors such as housing to rebound strongly, while other industries like airlines and restaurants remain moribund.
Obviously, the GDP numbers will give something positive for Trump crow about, but the numbers are tenuous, at best. Until we get control of the virus, the economy will remain volatile and unstable.
First time unemployment benefits last week reached 751,000
The number of Americans filing for unemployment benefits last week for the first time continued at historically high levels, reaching 751,000, slightly better than analyst predictions.
While the number of new jobless claims has fallen from its peak in the spring, weekly totals have remained at historically high levels as small businesses and large corporations shed staff in an attempt to right-size amid the coronavirus pandemic.