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Real Gross Domestic Product

• This is the worse GDP rate since this series began.

• GDP is down 9.5 percent, compared to a year ago, 2^nd Quarter 2020 versus 2^nd Quarter 2019.

• First quarter 2020 GDP was down 5.0 percent.

• The decline in both quarters reflect the effects states’ responses to COVID-19, as stay-at-home orders were in effect for nearly every state. In May and June these orders were relaxed in many states.

• Personal consumption expenditures (PCE) accounted for over three-quarters of the quarterly decrease.

• Private investment accounts for the vast majority of this decrease.

• Others sectors decreasing: exports, private inventory investment, nonresidential fixed investment, residential fixed investment, and state and local government spending.

• Federal government spending increased in the second quarter 2020, adding 1.23 percent to GDP.

• Imports also increased in the second quarter 2020.

• Corporate profits for the first quarter 2020 (most current), decreased $276.2 billion compared with positive growth of $64.8 billion in the fourth quarter 2019.

• The "second" estimate for the second quarter 2020 will be released on August 27, 2020.

Weekly Unemployment Claims

Initial unemployment claims decreased for the second consecutive month to 1,205,871 (NSA) for the week ending July 25, 2020.

Insured unemployment claims, a measurement of total unemployment with a week lag from initial claims, was 16,881,463 (NSA) for the week ending July 18, 2020. This is up 536,757 from the previous week.

The unemployment rate, based on insured unemployment claims, increased to 11.6 percent, up 0.5 percent from the prior week.

Forty-two states, including DC, reported decreases in initial claims for the week ending July 25. Six more than the previous week.  The top three states with decreases are:

               California            down     40,587

               Florida                  down     21,914

               Georgia                down     37,732

Nine states reported increases in initial claims for the week ending July 25. The top three states with increases are:

               Virginia                up           8,578

               Nevada                up           6,125

               Indiana                up           2,698

Phillips Curve

The Wall Street Journal’s Daily Shot reports on the distorted Philips Curve: “The Phillips Curve has been distorted because the outsize job losses among low-wage employees resulted in higher average pay for remaining workers”: