3 Months of Hell: U.S. Economy Drops 32.9% in Worst GDP Report Ever
The Coronavirus pandemic triggered the sharpest economic contraction in modern American history, the Commerce Department reported Thursday. Gross domestic product — the broadest measure of economic activity — shrank at an annual rate of 32.9% in the second quarter as restaurants and retailers closed their doors in a desperate effort to slow the spread of the virus, which has killed more than 150,000 people in the U.S. The economic shock in April, May and June was more than three times as sharp as the previous record — 10% in 1958 — and nearly four times the worst quarter during the Great Recession.
(NPR, July 30)
Maurice Klaehne's key takeaways:
- We are seeing the smartphone market rebound in May, June, and even July due to pent up demand, but given how we still have millions of unemployed people and rising COVID-19 cases, the economic outlook has been dire.
- Re-opening the country has helped some states regain economic activity close to the levels they had in 2019, but the spikes in Texas, Florida, and California put a damper on this.
- In addition, July was the last month where Americans could get up to $600 in extra unemployment money. Congress is trying to work out another economic stimulus package which includes extra unemployment benefits and another round of stimulus checks, but have not come to an agreement yet.
- The US is heavily looking towards vaccines to help alleviate the economic impact that COVID-19 is having. Other methods such as social distancing, mask-wearing, shutdowns, all have not been successful and have even been met with federal and state opposition.
- No federal mask mandates with states continuing to re-open restaurants, bars, and even schools all suggest additional risks and a continued high case count.
- This will continue affecting smartphone sales, although as we have seen with Apple, those OEMs who offer services can still increase their revenues in these pandemic times.
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Aug 4, 2020
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