Looks like nearly all news outlets went with this fake headline. Some even said the U.S. economy contracted 32 or 33% in Q2.
It did not.
They took the quarterly rate and pretended this would continue for 4 quarters – thus, the annualized loss would be 33% (rounded) if it continued but we already know it did not continue.
The quarterly drop was 9.5% (the NY Times got the story correct).
Some fake news reports compared the 33% annualized rate to a quarterly loss of 8.4% that occurred in late 2008, making the 33% look even worse. Right there the reporters should have realized their reporting error – but they did not.
The brain dead Oregonian made this completely untrue statement on the main page of their web site – it was a 9.5% drop, not a 33% drop in the quarter. The media doesn’t give a damn about accuracy.
Part of the problem is the NBER report and press release these news “stories” are mostly copied from did not make the Q2 quarterly number clear – and emphasized the annualized rate.
The annualized drop was slightly less than what had been forecast – and that would be good news, so shut up.
The result, of course, is excessive gloom and doom fake news headlines that did not accurately capture what just happened and what is happening now.
Some of the reports, such as the NY Times, did note that the massive drop was entirely self inflicted by public health policies.
Unlike past recessions, this one was a result of a conscious decision to suspend economic activity to slow the spread of the virus.
NPR, by comparison, completely mangled the story into nonsense:
Germany’s sharp drop in output [10.1% in the quarter] pales in comparison, however, to the 32.9% plunge [4 quarter analyzed rate] in U.S. gross domestic product for the same period — the steepest quarterly downturn ever recorded for the American economy.
That interpretation by NPR is 100% pure idiocy on steroids. That is incredibly stupid reporting.
The good news – the -9.5% quarterly down turn is expected to be followed by a +13% increase in Q3. But shhh … don’t let anyone know that, okay? Wouldn’t want people to be hopeful – want them to be anxiety ridden and having panic attacks!
Interestingly, the lock downs, apparently, did not work – see the massive spread of viral outbreaks occurring in July. But at least they put 40 million out of work, closed schools, harmed student education, created significant mental health problems – and destroyed the economy, so there’s that. Guess we call it a success then?