2nd Quarter GDP Shows Biggest Drop Since Great Depression

From The New York Times:

Economic output fell at its fastest pace on record last spring as the coronavirus pandemic forced businesses across the United States to close their doors and kept millions of Americans shut in their homes for weeks.

Gross domestic product — the broadest measure of goods and services produced — fell 9.5 percent in the second quarter of the year, the Commerce Department said Thursday. On an annualized basis, the standard way of reporting quarterly economic data, G.D.P. fell at a rate of 32.9 percent.

The collapse was unprecedented in its speed and breathtaking in its severity. The only possible comparisons in modern American history came during the Great Depression and the demobilization after World War II, both of which occurred before the advent of modern economic statistics.

Donald Trump and the congressional Republicans would like you to believe the economy is ready to bounce back -- even better than before. That is not true!

This is an economy in deep trouble -- more trouble than most Americans have seen in their lifetimes. And it won't be fixed by reopening businesses and schools. That will just help to spread the Coronavirus, and the economy cannot begin to heal until the virus is brought under control -- which the country is not even close to doing.

We cannot expect the GDP numbers to magically bounce back in the third quarter either. We are already one month into the third quarter, and the virus is still raging across the country. It is likely that the third quarter GDP will look as bad as the second quarter does.

This is going to be an extended recession, and anyone expect the economy to quickly bounce back is living in a dream world. Many small businesses will not recover from the recession, and many workers will be left without jobs even after the virus is controlled. The Bush recession took well over a year for the economy to recover, and even longer for many Americans to recover their own financial position. The Trump Recession could last even longer.

We should remember that the Trump recession didn't have to happen. If Trump had acted quickly and competently once notified of the Coronavirus (like Obama did after learning of Ebola), the economy might not have even had to be shut down. But Trump delayed doing anything for far too long, and then did not do enough. That continues to be the case.