(1/2) “We're currently witnessing the fastest economic recovery in American history…. “We've not only recovered but we're at a much higher level than we were even then… I think you're going to have an incredible GDP:”
• GDP fell by 5% in Q1 and by 32.9% in Q2, according to the Bureau of Economic Analysis
• It’s not clear that we’ll see a positive number in Q3, especially with some states and locales closing again;
• The economy is in recession not a recovery.
• Maybe, maybe not
• Increasingly, more economists are forecasting a “W” shaped recovery, with fits and starts, due to closures, openings, and closures again.
• True, but…
• Retail sales picked up by 1.2% in July from June, rising to $535B for the month, according to the Bureau of Economic Analysis
• That could be the highest in recent memory
• Sales of retail and food services were greased by online purchases
• BUT, economists wonder if the sales will retrench after all the federal relief measures expire, or are used up
• True, but…
• Overall factory output rose 3.4% in July from the previous month, according to the Federal Reserve
• Overall output was pulled higher by a 28.3% gain in production of cars, trucks and auto parts
• Most auto plants shut down completely when the coronavirus emergency hit in March and April, so a surge in production was expected when they reopened.
• True
• The average listing price of used vehicles was pushed upwards to $21,558 in July, up $708 from June, according to Edmunds
• Demand for used cars has accelerated during the pandemic
• True
• The S&P 500 dipped precipitously during COVID, but has recovered its losses
• It’s close to breaking a new record last set in February before COVID hit.
• True
• The Nasdaq Composite closed at a record 11,108 on 8/6
• While it has come down since then, it had been on a record breaking streak in recent months
• True
• The SBA reports that 51 million jobs were saved by the PPP program.
sba.gov/about-sba/sba-…
• True, but…
• NFIB July Survey: the optimism index declined by 1.8 points from June. The June survey was up by 6.2 points after falling sharply March-May. The current level is comparable to what it was at its highest point during the Obama administration (diff of ~.2)
• Not true
• Production has come down in recent months, because of COVID:
fred.stlouisfed.org/series/INDPRO/
• True that it is expected to grow, but…
• “Astronomical” is very subjective. The projected consumer spending is 8% in Q3, compared to -11.6% in Q2.
• Overall annual rate is projected to be -4.1%