With more than 2 million confirmed cases in the United States, GDP is expected to decline by 52.8% in the second quarter. Will it rebound in the third quarter?

According to the Atlanta Fed’s economic forecast model, U.S. GDP is expected to decline by 53% in the second quarter, with personal consumption expenditures, which account for 68% of U.S. GDP, falling by 58.1% from April to June. Total private domestic investment, which accounts for 17% of GDP, fell by 62.6%, and the U.S. Congressional Budget Office stated that it will take at least 10 years for the economy to return to normal.

The U.S. economy is in decline and the number of unemployed people is increasing. A few days ago, the U.S. made a joke. There was an error in the unemployment statistics. The unemployment rate was undercounted by three percentage points. The unemployment rate reached 16.3% instead of 16.3%. The previously announced 13.3% was a full three percentage points less.

1. U.S. GDP in the first quarter

The U.S. Department of Commerce announced that the U.S. GDP growth rate in the first quarter was -4.8%, far lower than the previous value of 2.1%. This is the first quarter since 2009. The largest quarterly decline was better than Goldman Sachs' forecast a month ago. On March 30, Goldman Sachs predicted that the real GDP growth rate of the United States in the first quarter would be -9.0%.

The GDP gap between China and the United States will inevitably narrow further in 2020

The U.S. blockade that began in mid-March caused a heavy blow to the U.S. economy and the closure of a large number of companies. Services that serve as the backbone of the U.S. economy The industry suffered heavy losses.

Now the GDP in the second quarter is expected to decline by 52.8%, resulting in a sharp decline in the total GDP of the United States. China will achieve a rebound in economic growth in the next few quarters, further narrowing the GDP gap with the United States.

According to data released by the International Monetary Fund (IMF) in April, the U.S. GDP is expected to decline by 5.9% in 2020, while China will achieve positive growth, with an economic growth rate of 1.2%, according to Far Eastern Research of the Russian Academy of Sciences Experts from the Institute recently stated that China’s GDP growth rate may increase to 4% in 2020. Judging from the gap in economic growth between China and the United States, China's GDP will account for more than 70% of the United States in 2020, and the gap will further narrow.

2. Will the U.S. economy rebound in the third quarter?

From the current situation, the biggest reason for the decline of the U.S. economy is the domestic epidemic in the United States. The domestic epidemic has led to a decline in economic activity, a decline in economic indexes, an increase in unemployment, and a heavy hit to the service industry. In 2019, the nominal U.S. economy The GDP is as high as 21.43 trillion U.S. dollars, and the service industry is as high as 17.36 trillion U.S. dollars, accounting for 81% of the total U.S. economy. Due to the current epidemic, the service industry has basically been shut down. Whether the U.S. economy can rebound in the future depends on whether the epidemic in the United States can be effectively controlled. According to the currently released data, the number of new confirmed cases in a single day in the United States has rebounded again, and the cumulative number of confirmed cases has rebounded. With 2 million cases, it accounts for nearly 30% of the cumulative confirmed cases in the world. 30 of 100 confirmed cases are from the United States. This ratio is indeed scary.

According to previous expert models, the turning point in the United States will arrive in May, but it is already early June and the turning point of the epidemic in the United States has not yet arrived. Based on current data analysis, the epidemic in the United States is very likely to continue. For a longer period of time, the epidemic cannot be controlled and the service industry cannot recover, so I do not think GDP will rebound in the third quarter. It is expected that U.S. GDP may decline even more in the third quarter, depending on the situation of epidemic control.