There have been two important U.S. economic data releases today: (1) advance estimates of Q4 and full year 2020 gross domestic product (GDP) growth; and (2) the latest weekly initial jobless claims number.
Both are set out in the standalone graphs below.
U.S. ‘real’ (after adjustment for inflation) GDP was +4.0% period to period annualized in Q4 2020, not so bad considering it was down by nearly a third (-31.4%) in 2020’s Q2.
More interesting, though, annual 2020 GDP was -3.5% vs 2019, not as steep a decline as was expected back in the Spring of last year.
In fact, -3.5% appears tame when compared with -11.6% in 1946, when WWII weaponry production ceased, and -12.9% in 1932, during the heart of the Great Depression.
Also, initial jobless claims delivered a result that was modestly upbeat. The latest weekly number on first-time unemployment insurance seekers moved in the right direction again, downwards.
It fell by -67,000 to 847,000, after climbing back up near a million in the prior week.
The number of ongoing UI recipients also took a step back, from 4.974 million to 4.771 million.
With a few fortuitous breaks along the way, especially on the vaccine roll-out front, 2021 may serve up a whole lot smoother ‘ride’ than we experienced in 2020.
Graph 1: U.S. ‘Real’ GDP Growth, Y/Y & Q/Q
‘Real’ is after adjustment for inflation.
Data source: Bureau of Economic Analysis (BEA).
Graph 2: U.S. Initial Jobless Claims Weekly ‒ as of January 23, 2021
Data source: Department of Labor.