Sorry To Interrupt, But The Economy Seems To Be ON FIRE
So much for that V-shaped recovery.
This morning we were punched in the gut with two ominous economics reports that sent the stock market reeling. During April, May, and June, the American economy suffered its worst single-quarter contraction ever. And new unemployment claims are up again this week, suggesting that things aren't getting better any time soon. We are generally skeptical of claims that Donald Trump is playing nine-dimensional chess to distract us from the news with his crazy tweets, but this morning ... seems pretty likely.
The Bureau of Economic Analysis reported yesterday that the GDP fell by about 10 percent in the second quarter. Well, actually it said that "real gross domestic product (GDP) decreased at an annual rate of 32.9 percent in the second quarter of 2020." Which is kind of like saying, "July was the rainiest month on record, and if we keep this up for an entire year, we'll all drown." You'll see that 32.9 percent figure repeated ad nauseam because it's so hair on fire, but one bad quarter does not equal a Great Depression. Particularly when we did it on purpose.
Remember, the plan was to put the economy in a medically induced coma (more or less) for a few months to stop the spread of COVID-19 and give us time to get this pandemic under control. That's what they did in Denmark, and Australia, and New Zealand, and China, which are all returning to some version of normal life now.
But none of those countries is led by a president as spectacularly incompetent as Donald Trump. South Korea, which diagnosed its first coronavirus case the same day we did, had 18 new cases yesterday. We had 63,255. In case there is anyone on Planet Earth who hasn't worked it out yet, coronavirus is definitely not under control in the United States.
Which is why the unemployment numbers are so alarming. For the second week in a row, the number of people filing new unemployment claims rose, meaning that the economy is heading in the wrong direction. With the 1,430,000 people who filed last week, there are now 17 million Americans out of work. And we didn't do that on purpose. That part was supposed to be over by now.
Kushner and Kudlow and Mnuchin and the rest of Trump's happytalk minions have promised that the economy will take off like a rocket in the third quarter. And yet here we are, one third of the way through Q3, with real-time data showing just the opposite. Not that anyone in the country needed the BEA to tell them that shit is really bad out there, but the combination of the retrospective assessment of Q2 GDP and the weekly jobs numbers is a horrifying road sign showing that we're pulling off Recession Highway to More of the Same Lane. Which is why Americans are socking away as much cash as they can, because they know damn well that things are not getting better any time soon. As labor economist and former member of Obama's Council of Economic Advisers Betsey Stevenson notes:
The only thing holding this shit together is the $600/week unemployment subsidy from the federal government, which has at least put cash into people's pockets so they can go to the grocery store and keep a roof over their heads. So naturally the GOP is trying to zero it out (and in fact it's already lapsed) — Republicans are very good at ECONOMY.
They're also very hot to make sure state governments don't get any federal money, virtually ensuring that hundreds of thousands of middle class jobs will eliminated as states lay off employees to balance their coronavirus-decimated budgets.
So ... yeah. It's not a good morning.
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Liz Dye lives in Baltimore with her wonderful husband and a houseful of teenagers. When she isn't being mad about a thing on the internet, she's hiding in plain sight in the carpool line. She's the one wearing yoga pants glaring at her phone.