Q2 GDP Was Pretty Gross

The Bureau of Economic Analysis reported this morning that second quarter GDP fell 32.9% and that was a slightly smaller plunge than the 34.5% pre-release estimate. Personal Consumption, the largest input to GDP, fell 34.6% and that was pretty close to what was forecast. Inflation in Q2 as measured by the core Personal Consumption Expenditures Index fell 1.1% versus Q1. Bad news all around, but none of it a surprise.

Also out this morning, the BLS reported that, for the week ending July 25th, Initial Jobless Claims rose 1.43M; slightly less than the 1.45M expected, but still slightly more than the prior week’s upwardly revised 1.42M. That’s the second week in a row the first-time applicant total grew. Continuing Claims for the week ending July 18th rose to 17.02M from the prior week’s 16.15M. Analysts had expected 16.2M.

Despite the dovish remarks and assurances given by Chairman Powell at yesterday afternoon’s post-meeting press conference, equity markets look to open in the red while Treasuries rally. The Ten-Year’s yield has fallen to 0.55% while the Two-Year at 0.12% is only a couple of basis points away from its all-time low reached in May. Gold has slipped almost $20 to around $1,951 while crude oil is also off a bit, less than a dollar, to around $40.58.