US Q1 GDP Estimates – Negative Growth as Economy Retracts

Posted on 30 April 2020 by Ken Zino
AutoInformed.com on US Real GDP Q1 2020

The worst is yet to come…

The Department of Commerce’s Bureau of Economic Analysis (BEA) advanced estimate for gross domestic product (GDP) for the first quarter of 2020, says that real gross domestic product contracted at an annual rate of -4.8%. Current‑dollar GDP decreased -3.5% or -gulp –  $191.2 billion, in the first quarter to a level of $21.54 trillion.

“Today’s GDP numbers are weak, but in line with expectations as a result of the COVID-19-driven disruptions to daily lives at home and around the globe that have rocked global markets and supply chains,” claimed U.S. Secretary of Commerce Wilbur Ross. In the fourth quarter of 2019, real GDP increased 2.1%.

The decrease in real GDP in the first quarter exposed negative contributions from personal consumption expenditures (PCE), nonresidential fixed investment, exports, and private inventory investment that were partly offset by positive contributions from residential fixed investment, and notably federal government spending which add at least be several trillion dollars to the swelling US deficit, and state and local government spending, which will likely be propped by US taxpayer welfare payments to governments.

The decrease in PCE echoed decreases in services, led by health care, and goods, led by motor vehicles and parts. The decrease in nonresidential fixed investment primarily reflected a decrease in equipment, led by transportation equipment. The decrease in exports primarily reflected a decrease in services, led by travel.

The “second” estimate for the first quarter, based on more complete data, will be released on May 28, 2020. BEA will release results from the 2020 annual update of the National Income and Product Accounts on July 30, 2020, in conjunction with the advance estimate of GDP for the second quarter of 2020.

Given Wilbur Ross’s previous statements the upcoming GDP estimates will be Trump re-election campaign documents, likely as disconnected from economic reality as Trump and his courtiers who stood by and watched the ongoing US COVID-19 disaster happen, claiming it would disappear by the beginning of April.

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About Ken Zino

Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn. He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe. Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap. AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks. Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.
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One Response to US Q1 GDP Estimates – Negative Growth as Economy Retracts

  1. Pingback: Fed – May Retail Sales Far Below Earlier Levels | AutoInformed

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