The second quarter ends next Tuesday on June 30, but economic numbers concerning the quarter will still roll in for the next several weeks. That said, we’ve already got a lot of information on what happened, or didn’t, in the economy since April 1, and it’s not good.
The Atlanta Federal Reserve Bank maintains a model that estimates quarterly change in GDP and continually updates as new information becomes available. Including recent home sales, jobless claims, and durable goods orders, through June 25 the model estimates second-quarter GDP will fall an eye-popping 46.6%!
From the Atlanta Fed:
After this week’s data releases from the U.S. Census Bureau, the U.S. Bureau of Economic Analysis, and the National Association of Realtors, a decrease in the nowcast of second-quarter real residential investment growth from -25.9 percent to -35.9 percent was offset by an increase in the nowcast of real business fixed investment growth from -31.1 percent to -28.2 percent, while the nowcast of the contribution of the change in net exports to second-quarter real GDP growth decreased from 0.30 percentage points to -1.27 percentage points.
The only good news, if there is any, is that the numbers are annualized, which means the actual decrease in the quarter is a mere 11.65%. Economic activity will pick up in the third quarter, but the U.S. economy is expected to contract by 6% to 8% for the entire year, which is several times the 2.6% contraction during the Great Financial Crisis.