How Bad Is It?
After the economy fell into recession following the Covid-19 outbreak, many people have been trying to gauge how bad this was going to be for the economy. Well, the numbers are in and they are not pretty…
In the first 3-months of the year, U.S. Gross Domestic Product (GDP) contracted by 3.7%. As we know, the next three months just got more and more mad as the days went by.
So the question is: “How much more damage did the past 3 months cause?”
Since the year 2001, U.S. annual GDP growth has remained between -2.5% to 3.8%.
When put into perspective,first quarter GDP numbers have already surpassed the worst number in the last 19 years by over a full percentage point. And we weren’t even in the midst of the pandemic.
If you don’t know the number yet, let’s play a guessing game! If the first quarter U.S. GDP numbers were down -3.7% while quarantine had barely even started, how much worse are the 2nd quarter numbers? 2 times worse? 5 times worse?
Believe it or not, they are about TEN TIMES WORSE than they were in the first quarter.
In the 2nd quarter alone, U.S. GDP contracted a total of 31.7% on an annualised basis.
This was just slightly better than analyst estimates but when put into historical perspective, it is clear that these numbers are no joke!
After reading the worst data in U.S economic history, it is important to remember:
“Nothing is permanent in this wicked world, not even our troubles.”—Charlie Chaplin
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.