During this year’s second quarter, the U.S. economy contracted at a projected annual rate not seen even during the Great Depression.
The record 9.5-percent drop in productivity equates to annual plunge of 32.9 percent.
The cumulative loss during the first six months of this year is 14.75 percent, roughly the rate of economic slump seen in Russia in 1992, the year after the Soviet Union crumbled.
Consumer spending, which comprises 70 of the U.S. GDP, is the foundation of the U.S. economy. During the last quarter, spending on services retreated 43.5 percent; outlays for nondurable goods, such as groceries, was down 15.9 percent.
Spending on durable goods, such as cars and refrigerators, was off only 1.4 percent. It is suggested many consumers used their $1,200 federal stimulus checks to make big-ticket purchases that had been put off.
Underscoring the disaster, on 30 July, the U.S. labor department reported 1.43 million new claims for unemployment benefits, the 19th consecutive week new claims topped one million.
New claims rose in the last two weeks after falling for several. As of 18 July, 17 million Americans were collecting unemployment payments, even though employers added 7.3 million jobs during May and June.
That equates to 11.1 percent of the U.S. workforce collecting unemployment insurance.
With the media hysteria of “rising cases” and politicians re-locking down cities and states, we forecast the return of jobs has braked, especially in southern and western states.
At the same time, the $600 weekly federal unemployment benefit has expired along with the ban on evictions and foreclosures. During the week of 27 July, about 30 million Americans – almost one in every ten – reported lacking adequate food.
TRENDPOST: Meanwhile, the stock market continues to rise, floating on the sea of artificially cheap money flowing from the Fed’s tap.
The Dow Jones Industrial Average has soared 42 percent since its mid-March low, oblivious to the country’s worst economic performance in more than a century.
The stock market’s frenzy has made the rich richer, helping billionaires boost their wealth by 80.6 percent from 2010 to the end of 2019. Since February, when the COVID panic reached the U.S., the stock market’s relentless glee has given them an additional $565 billion.
