The COVID economy in 6 charts: Rebounding from recession could prove tougher in months ahead

Written by on July 26, 2020

After struggling the steepest and quickest recession in historical past amid the COVID-19 pandemic, the U.S. economic system started to recuperate in Might and June at a extra sturdy tempo than most analysts anticipated.  

Economists largely credit score trillions of {dollars} in federal assist that saved shoppers spending, together with $1,200 stimulus checks, beneficiant unemployment advantages, and forgivable federal loans to small companies that retained or rehired workers.

However clawing again the remainder of the misplaced floor is prone to be a harder slog. The federal packages are expiring until Congress shortly votes to increase them in some type. Some corporations, notably in journey and retail, are shedding staff completely. And amid spikes in coronavirus instances throughout a lot of the nation, many states are at the least partly shutting down companies that had reopened.

The comeback thus far gained’t be evident in subsequent week’s Commerce Division report on financial progress within the second quarter, which is anticipated to disclose the most important decline in U.S. gross home product on file. That’s mainly as a result of the economic system fell off a cliff in April.

However different latest information on jobs, housing and retail gross sales underscore the power of the rebound so far.

Right here’s a have a look at six key developments that can assist you grasp the economic system’s well being:

GROSS DOMESTIC PRODUCT

Gross home product, or GDP, the worth of all items and companies produced within the nation, fell at a seasonally adjusted annual fee of 5% within the first quarter, probably the most for the reason that 2008 recession, and a report subsequent week is anticipated to disclose a file 34% tumble within the second quarter. The wholesome rebound anticipated within the second half of the 12 months is prone to nonetheless depart GDP beneath its pre-pandemic degree.

UNEMPLOYMENT RATE

The share of the U.S. workforce with no job had been in regular decline since 2009, reaching a 50-year low of three.5% in February. However unemployment shot as much as 14.7% in April 2020, highest for the reason that Nice Melancholy, earlier than dropping to 11.1% by June as eating places, retailers and different small companies rehired staff. After shedding 22 million jobs in March and April, the nation recouped 7.5 million in Might and June.

Month-to-month proportion adjustments:

CONSUMER CONFIDENCE INDEX

After plunging to a six-year low in April, the Convention Board’s client confidence index rebounded strongly in June however remained effectively beneath pre-crisis ranges.

RETAIL SALES

U.S. retail gross sales tumbled a file 14.7% in April earlier than climbing 18.2% in Might and seven.5% in June, leaving whole gross sales simply 1% beneath the January degree. However with states reversing reopenings, additional robust good points might be harder to attain.

Month-to-month proportion adjustments:

HOUSING SALES

Current housing gross sales slipped to a seasonally adjusted annual fee of 4.three million in April and three.9 million in Might earlier than surging a file 20.7% to 4.7 million in June on file low mortgage charges and pent-up demand. Some economists anticipate further good points in coming months however that might be jeopardized by reopening rollbacks that damage job good points.

Month-to-month gross sales in hundreds of thousands, seasonally adjusted:

S&P 500

The S&P 500, a broad measure of U.S. shares, tracked the economic system’s preliminary fall however rebounded a lot sooner. After plummeting 34% from its late February excessive, the index started climbing again in March and is simply 4.4% off its all-time excessive as of July 23.


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