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The county’s production of goods and services fell a record 9.5 percent in the second quarter of this year, according to a report from the U.S. Commerce Department on Thursday.
In annualized terms, which assumes the trend holds for the rest of the year, that means the U.S. gross domestic product fell at a rate of 32.9 percent. The unprecedented decline has been described as comparable only to the Great Depression and period after World War II.
— Joe Weisenthal (@TheStalwart)
But most economists had expected a sharp contraction.
“As horrific as the GDP number is, it’s basically reporting something that we all already knew—that economic activity came to a screeching halt as the virus altered the contours of our lives. Millions lost their jobs, and the real issue is how our economy recovers,” tweeted Justin Wolfers, a prominent economist.
Many headlines will say GDP fell 32.9%.
What they mean is that it fell at an annualized rate of -32.9% which is the result of a thought experiment asking how much lower would GDP be if the recent rate of decline persisted for a year.
But no-one thinks that’ll happen. Ignore it
— Justin Wolfers (@JustinWolfers)
Wolfers has previously argued that the GDP fails to account for the necessary actions taken by Americans to stay at home and socially distance during a historic public health crisis.
“In a typical recession, millions of people could be more productive if they could find work, but economic dysfunction robs them of this opportunity. This downturn is different. In the pandemic economy, the most productive thing that many people can is stay home,” he wrote back in May for a New York Times piece.
He added: “A truer measure of output would recognize that collective output hasn’t fallen; it has merely shifted so that we’re producing less ‘stuff’ and more public health.”
But the problem, as some experts have pointed out, is that the collective sacrifice has not resulted in the country extinguishing the virus. Rather, hurried reopenings have allowed the pandemic to surge across most of the country—and force another round of shutdowns.
“In another world, a sharp drop in activity would have been just a good, necessary blip while we addressed the virus,” Heather Boushey, president of the Washington Center for Equitable Growth, a progressive think tank, told the Times. “From where we sit in July, we know that this wasn’t just a short-term blip.”
More bad news followed the GDP report. On Thursday morning, the Labor Department reported that 1.43 million Americans filed new claims for state unemployment benefits, the second weekly increase in a row after almost four months of decline.
In New York, new jobless claims fell by more than 3,000 during the prior week to 85,000. But like last week, the total number of New Yorkers currently receiving benefits increased by 10,000 to 1.54 million—a sign that new job losses are exceeding the number of people returning to the workforce. The same concerning trend was true for the country as a whole, the first time that has happened since the week of May 23rd.
Meanwhile, a top White House official confirmed on Wednesday that a $600 weekly federal benefit that has been provided on top of state unemployment checks is likely to expire on Friday.
Democrats and Republicans have been unable to reach a compromise on extending the benefit.
During his morning press briefing, Mayor Bill de Blasio called the end of the federal stimulus checks “sobering and painful.”
New Yorkers who are unemployed are now eligible to apply for 20 weeks of extended benefits under a federal program. They must first exhaust all 26 weeks of traditional unemployment insurance benefits and all 13 weeks of the federal Pandemic Emergency Unemployment Compensation benefits.
Earlier this month, several New Yorkers told Gothamist how much they relied on the extra $600 a week.
“My guess is that some people at the end of this month might be surprised to find that second direct deposit isn’t hitting,” said Sylvy Fernandez, a Brooklyn resident.
This content was originally published here.