Ostrum
  • News & Chronicles
  • France
  • Euro Area
  • United States
  • International
  • Politics & Society
  • Monetary Policy
  • Media
  • Decoding
  • About Philippe Waechter
Philippe Waechter's blog
  • Insights
  • About us
  • Expertise
  • Our people
  • Media

Philippe Waechter's blog
My french blog
  • News & Chronicles
  • France
  • Euro Area
  • United States
  • International
  • Politics & Society
  • Monetary Policy
  • Media
  • Decoding
  • About Philippe Waechter
  • News & Chronicles
  • Climate
  • France
  • Euro Area
  • United States
  • International
  • Politics & Society
  • Monetary Policy
  • Media
  • Decoding
Philippe Waechter's blog
Prévôté
Previous Next
  • 2 min

Strongest decline in US activity since the 4th quarter 2008.

  • 29 April 2020
  • Philippe Waechter
  • Consumption and Covid-19
  • GDP Growth
Total
0
Shares
0
0
0

March was devastating for the US economy with a 6.7% drop in consumer spending. The measure of the decline in activity will increase in the second quarter. The breaks noted in surveys are really observed in April. The very expansionary policy will not reverse the trend due to the unprecedented magnitude of the contractions observed. The recession in 2020 will be very large.

US GDP in the first quarter contracted by -1.2% (-4.8% annualized). Over one year, the GDP only increased by 0.3%. The carry over growth for 2020 at the end of the first quarter is negative at -0.45%.
The measure of this contraction in GDP can be compared to that of -2.16% (non annualized) recorded in the last quarter of 2008 just after the Lehman shock. We should expect a contraction of GDP for 2020 between -4.5% and -6%.

Consumers’ expenditures in March have penalized the American activity. Household spending fell -1.9% in the first quarter but fell -6.7% in the month of March alone. It had increased in January and February. It is, in March, that the more severe pattern of the pandemic contagion took place but also the spectacular adjustment of the labor market, that explain the poor performance of the economy in the first quarter. Productive business investment is also falling sharply and for similar reasons. The increased uncertainty has resulted in a rapid decline in capital spending. Government spending was neutral over the quarter. Inventories have a limited negative contribution and foreign trade has a positive contribution. The fall in imports (weaker domestic demand) was greater than that in exports.

Annex
Consumption fell mainly in March in phase with the appearance of the Covid-19 in the USA and the strong adjustment of the labor market.

Related Topics
  • Consumption and Covid-19
  • GDP Growth
On the same topic
  • 1 min

The US economy erases the crisis

  • 27 January 2022
  • United States

Philippe Waechter

US GDP is up 1.7% in Q4 (6.9% annualized). GDP growth is 5.5% YoY in Q4 and 5.7% on average for 2021. The carryover growth for 2022 is 1.9%. GDP…
  • GDP
  • Growth
READ
  • 2 min

The Federal Reserve takes over

  • 27 January 2022
  • Monetary Policy

Philippe Waechter

At its January 25-26 meeting, the US central bank confirmed that it would raise interest rates as of its mid-March meeting. Above all, it indicated that very soon after it…
  • Federal Reserve
  • Inflation
  • Interest Rates
READ
  • 3 min

Inflation continues, the Fed could weigh on growth

  • 13 January 2022
  • Monetary Policy

Philippe Waechter

US inflation is mainly conditioned by the pace of the price of goods and that of oil. The rush of households on goods, while inventories were reduced, is the source…
  • Energy price
  • Inflation
READ
Subscribe to the newsletter

All the news from Philippe Waechter’s blog in your mailbox


Loading
ABOUT PHILIPPE WAECHTER

Ostrum's expert magazine

ABOUT OSTRUM AM
  • About us
  • Media room
  • Our publications
  • Cookie Policy (EU)
FOLLOW ME ON
EXTERNAL LINKS
  • Economists
  • Think tank
  • Central banks
  • Blog roll
©Ostrum AM 2022
An affiliate of : Plan de travail 2

Input your search keywords and press Enter.

Manage Cookie Consent
We use cookies to optimize our website and our service.
Functional Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
Manage options Manage services Manage vendors Read more about these purposes
View preferences
{title} {title} {title}