By Scott J. Brown, Ph.D., Raymond James
The GDP Arithmetic – Real GDP was reported to have fallen at a 32.9% annual rate in 2Q20. Nobody should have been surprised by that. Barring a sharp retreat in August and September, consumer spending figures point to a record pace of growth in 3Q20. Still, as Fed Chair Powell noted in his post-FOMC press conference, “Even with the improved economic news in May and June, overall activity remains well below its level before the pandemic.”
This Week – July economic figure begin to arrive, with a focus on the ISM surveys and the employment report. Jobs lost in March and April should continue to come back in July, as they did in May and June. However, the elevated trend in weekly jobless claims suggests that there are ongoing job losses in the broader economy. Needless to say, there is a lot of uncertainty in the monthly payroll figures, but that is especially so in July, when we typically shed 1.3 million education jobs. Many of those jobs were likely lost earlier this year, which would result in a seasonally adjusted increase.