By Thomas Cooley and Peter Rupert
The BEA’s second estimate showed an upward revision of 1.2 percentage points…so that real GDP fell by “only” 31.7% on an annual basis instead of the 32.9 stated in the advance estimate. Private inventory investment and personal consumption expenditures (PCE) decreased less than noted in the advance estimate. Note that what “on an annual basis” means is that if GDP fell by as much as it did this quarter (9.1%) for four quarters it would lead to a 31.7% decline for the year. Make no mistake, however, 9.1% is an extremely large quarterly decline. Real PCE
Initial and Continuing Claims
Initial claims (not seasonally adjusted) fell to 822,000 after increasing the previous week. Continued claims fell to to about 14 million.
Personal Income and Outlays
The BEA released personal income and outlays for July with a 0.35% gain to personal income and a 1.92% gain in PCE. The personal savings rate fell to 17.8%.
While the economy continues its slow march back to something like normality, we are certainly not out of the woods, maybe the trees have thinned some though. Moreover, the stock market seems to have ignored the symptoms and the housing market has sprung back as well.
