BNY Mellon Investment Management chief strategist Alicia Levine discusses whether the market is finding its niche as small-cap stocks begin to outperform larger-cap tech stocks.
WASHINGTON – The US economy contracted at a dizzying 33% annual rate in the April-June quarter, by far the worst quarterly decline in history, when the viral outbreak closed businesses, leaving dozens out of work. in the millions and raised unemployment to 14.7%, the government said Thursday.
The Commerce Department’s estimate of the second-quarter decline in gross domestic product, total production of goods and services, marked the largest decline in records dating back to 1947. The worst previous quarterly contraction, a 10% drop, It happened in 1958 during the Eisenhower administration.
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The fall in the last quarter followed a 5% drop in the January-March quarter, during which the economy officially entered a recession caused by the virus, ending an 11-year economic expansion, the longest recorded in the United States. United.
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The contraction in the last quarter was driven by a deep decline in consumer spending, which represents approximately 70% of economic activity. Consumer spending collapsed at an annual rate of 34% as travel, except for frozen and closed orders, forced many restaurants, bars, entertainment venues and other retail establishments to close.
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Business investment and residential housing also suffered sharp declines in the last quarter. Government spending, slowed by a loss of tax revenue that forced layoffs, also fell.
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The labor market, the most important pillar of the economy, has been seriously damaged. Tens of millions of jobs disappeared in the recession. More than 1 million people fired have applied for unemployment benefits for 18 consecutive weeks. So far, about a third of lost jobs have been recovered, but the resurgent virus is likely to further decrease earnings in the job market.
