This is Covenant’s Economic Review & Outlook for the 2nd quarter of 2020. In this video, Karl Eggerss & Justin Pawl outline the current economy, the shape of the recovery, and investment considerations. Where we are now? Where are we going?
Economic Review and Outlook
In this update, we evaluate what current economic trends mean for the future and why, paradoxically, the Fed is more likely to cut interest rates this year than raise them.
In the second quarter, only two sectors of the economy contributed positive growth, and deteriorating trends suggest our “Good but not great” growth outlook for the economy will come under pressure in coming quarters.
Following a month-long delay due to the government shutdown, officials confirmed what economists and investors already suspected – the economy is slowing.
In addition to reporting the fastest quarterly economic growth in four years, the Bureau of Economic Analysis revised several years of recent economic data and “found” $3 trillion of previously unreported income.
In many ways, 2017 was a prototypical post-Financial Crisis year with regards to economic growth.
The economy expanded at a real, annualized rate of 2.6% in the second quarter, while first quarter growth was revised down to 1.2% (vs. the previous estimate of 1.4%).
During the first quarter, the economy expanded at a real, annualized rate of 0.7%. Relative to consensus estimates for Q1 growth and recent real growth rates in the latter half of 2016, this can only be described as a disappointing start to the year.