Second quarter’s GDP results revealed an unprecedented decline of the economic activity by 31,4%. But with the economy to have recovered to quite a big extent, this trend is expected to be reversed with a historic rate in the third quarter too. Third quarter’s data will be released only five days before the american elections.
Consumption, as captured in the consumer spending ratio, after sharply declining to 2009 levels, it rose dramatically. Since American citizens can now move around freely, consumer spending is about to increase even more. Consumer spending ratio is a fairly reliable indicator that can lead to safe conclusions regarding GDP’s course. If everything goes well, then it should not come as a surprise to us if GDP of the American economy will eventually have shrunk even less than 4% by the end of 2020.