https://www.cnbc.com/2020/10/20/the-gdp-report-next-week-will-likely-show-record-breaking-economic-growth-but-it-may-not-help-trump.html
On Thursday next week the U.S. will announce the GDP growth for the previous quarter and it is expected to show some record breaking growth. Now, obviously, this growth can be misconstrued with the current economic climate. The U.S. is going to experience serious growth because of the down turn that we experienced in the past 8 months. The timing of this news may be good for President Trump as it will come just a few days before election day, but this growth shouldn't necessarily be attributed to Trump's presidency. The growth is really just a product of the recession that the country experienced.
The reason that this news may not necessarily help Trump in the polls is because the presence of mail-in ballots and early voting. In addition to this the Federal Reserve is forecasting that we are going to have a major drop in GDP this year. It will be interesting to see the if there is any change in the polls after the information is announced.
With the projected increase in GDP, there is an increase in the economic conditions in the next six months. This is interesting because we are beginning to have a "relapse" when it comes to the COVID-19 pandemic and it seems that the potential for a shutdown or partial shutdown is becoming more and more possible. It seems as if the outlook of the economy is dependent on if there is a vaccine within the next six months.
4 comments:
I'm curious if the news of a record breaking growth may change consumer or shareholder confidence. It is apparent that there is a relapse that is oncoming, but I'm wondering if consumers especially may overlook that in hopes of a vaccines coming relatively soon. Shareholders may wait until a big drop comes around again and may invest a lot more knowing that a huge growth is possible after the dip. I'm also wondering if this will help boost the economy during the next relapse. Hopefully, this growth doesn't lead to a big crash because what goes up must come down.
Just like you Chase, I am interested in seeing how this will affect the polls. As you mentioned in your article, the cause of the growth can be misleading, so I hope that it does not affect people's voting choice to a certain extent. I am also wondering whether this information will be accurately explained to the public, especially in case president Trump gives himself credit for the GDP growth. In any event, the outlook of the country's economy is uncertain, the variety of predictions and forecasts that have came out are not very promising so I stay in hope of a vaccince soon and that perhaps as discussed by Maia, changes in consumer and shareholder confidence during the next relapse, would help improve the economy.
This should be no surprise to many because the us shut down a lot business and as they being to open back up towards full capacity of course it will show great growth. The reason for this is because the US lost a lot of labor force but capital remained unchanged this loss in labor forced moved the economy out of the steady state and as it moved out the growth rate is larger because there is more capital per person but as the labor forces restocks we will move back to the steady state and see are economies growth being to slow down
I don’t think this growth will affect people’s vote, at least not significantly. Most people have had their minds made up and/or already casted their vote. The growth is a temporary jolt from the economic activity coming alive again and stimulus spending along with it. It will be interesting to see how the election outcome and a vaccine release will affect consumer’s confidence.
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