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.