|作者：||Jessie GUO,Harrington ZHANG,Edith Qian|
|摘要：||Report title:Macro Report - US 2Q GDP recorded historical plunge
Analyst:Jessie GUO,Harrington ZHANG,Edith Qian
■ GDP slumped 32.9% annualised in 2Q, by far the largest in history
■ Personal consumption plummeted 34.6%, the largest single drag
■ Fiscal support and COVID control determine size of rebound in 3Q
What’s new. On July 30, the BEA announced that the US economy contracted by an annualised 32.9% qoq (-9.5% yoy) in the 2Q, the largest single quarter decline since the record began, although slightly better than the consensus of contracting 34.5% (1Q20: -5.0%). This plunge reflects the sudden stop of economic activity due to nationwide lockdown measure introduced in April as a response to the widespread outbreak of COVID-19. While the subsequent months have seen robust rebound in some sectors, they still remain considerable below the pre-COVID levels.
Personal consumption expenditure led the way of slump. The PCE plummeted 34.6% (all annualised, unless stated otherwise) qoq in 2Q, also by far the largest quarterly contraction on record. Services sector made the largest contribution to the PCE decline with a 43.5% qoq plunge, mainly due to the social distancing and stay-in-shelter measures not only imposed in April but also voluntarily practised by people after the re-opening, under the concerns of contracting the virus. Moreover, goods consumption was down 11.3% qoq, with nondurable goods contracting 15.9% qoq. Durable goods dropped only relatively limited 1.4% qoq, as a large comeback was made in May and June, which is consistent with recent retail sales data. Overall, consumption was the predominant force of this historical 2Q contraction, and we expect it to lead the recovery too.
Gross private investment plummeted 49.0% qoq, nearly record-breaking. Fixed investment was down 29.9% qoq, among which business investment dropped 27% qoq with transport equipment making the worst contribution to GDP under this category. Residential investment slumped by 38.7% qoq, which was fuelled by an unfavourable base effect carried from 1Q. In addition, change in inventory also made a -4 pts contribution to GDP. Trade was no exception, exports slumped 64.1% qoq, with imports down 53.4% qoq. Although exports contracted more than imports in percentage terms, due to the former was much smaller than the latter in an absolute term, net exports actually made a positive contribution of 0.68 pts to GDP.
Federal government spending was the only sector recorded growth. An unprecedented fiscal stimulus brought by the CARES Act boosted federal government expenditures by 17.4% qoq. Excluding defence, the figure increased by an astonishing 39.7% qoq; a reflection of how large the fiscal support was in 2Q, but it is under serious threat now as Congress is still debating on the extension of lifeline support of millions of unemployed Americans, which are due to expire on Friday. State and local government spending was down 5.6% qoq, indicating the financial condition of local governments’ balance sheets was worsening last quarters.
Our view: Overall, the size of GDP contraction in the second quarter was largely expected and is old news now. We expect the US economy to record meaningful gain in the third quarter as both the recovery is well underway since May and the low base effect carried from 2Q. However, we are slightly less optimistic on the speed of recovery than we were a few weeks ago, as a reflection on the recent events of renewed COVID-19 outbreak and the possible delay or slash of further fiscal stimulus.