The U.S. Is in a Recession

Even though there are many measures of economy, Misbar’s investigation found misinformation in the social media claim made by President Trump. 

One measure often used to measure the economy is the Gross Domestic Product (GDP). The U.S. Department of Commerce’s Bureau of Economic Analysis releases the data quarterly. The GDP is the market value of all goods and services produced in a nation during a specific time period. It measures wealth by indicating how fast profits may grow and the expected return on capital. The GDP fell 9.5 percent in the second quarter of the year. 

One quicker measure of the economy is the Weekly Economic Index (WEI). The WEI was developed to track more daily and weekly indicators of real economic activity. At the end of August, 2020, it was at -4.41 percent. This means that if the given week’s conditions persisted for a full quarter, then we would, on average, expect GDP to shrink by 4.41 percent that quarter relative to a year prior. 

In terms of jobs, the Bureau of Labor Statistics reported that unemployment in August was 8.4 percent, with 13.6 million Americans still unemployed. According to the Pew Research Center, the rate of unemployment was as low as 3.8 percent in February. 

The economic rebound also depends on consumer confidence. The Consumer Confidence Survey can provide a measure of the thoughts and feelings consumers are having about the labor market, consumer spending, economic growth, and employment expectations. This can then be used as a leading indicator of consumer spending. Unfortunately, this measure has also decreased. According to Lynn Franco, Senior Director of Economic Indicators at The Conference Board, “Consumer Confidence declined in August for the second consecutive month. The Present Situation Index decreased sharply, with consumers stating that both business and employment conditions had deteriorated over the past month. Consumers’ optimism about the short-term outlook, and their financial prospects, also declined and continues on a downward path. Consumer spending has rebounded in recent months but increasing concerns amongst consumers about the economic outlook and their financial well-being will likely cause spending to cool in the months ahead.”

While the economy has improved since the start of the pandemic and unemployment has decreased from just after the pandemic, the economy is still not doing well by many important economic indicators.