WASHINGTON, July 29 (Xinhua) — U.S. real gross domestic product (GDP) in the second quarter is expected to contract by an annualized rate of 32.1 percent, according to the estimation from the Federal Reserve Bank of Atlanta’s GDPNow model updated on Wednesday.
The latest estimation is up from a contraction of 34.3 percent released on Monday, factoring in this morning’s Advance Economic Indicators report from the U.S. Census Bureau, and revising the contribution of the change in real private inventory investment to second-quarter real GDP growth.
Noting that official estimate is released with a delay, the Atlanta Fed said GDPNow forecasting model provides a “nowcast” of the official estimate prior to its release by estimating GDP growth using a methodology similar to the one used by the U.S. Bureau of Economic Analysis (BEA).
The BEA is scheduled to release the advance estimate for the second quarter GDP on Thursday, as market participates brace for the worst quarterly contraction in U.S. economic activity in decades.
The U.S. Federal Reserve on Wednesday kept its benchmark interest rate unchanged at the record-low level of near zero amid a recent resurgence in COVID-19 cases nationwide, noting that the path of the economy will depend significantly on the course of the virus.
“Following sharp declines, economic activity and employment have picked up somewhat in recent months but remain well below their levels at the beginning of the year,” the Fed said in a statement after concluding a two-day policy meeting.
“The ongoing public health crisis will weigh heavily on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term,” said the central bank.
Meanwhile, Senate Republicans’ 1-trillion-U.S.-dollar COVID-19 relief proposal has drawn backlash from lawmakers and economists, and the country’s two parties are still far from reaching a deal days before extra unemployment benefits expire.
Mark Zandi, chief economist of Moody’s Analytics, recently warned that the U.S. economy is at serious risk of sliding back into a double-dip recession unless Congress and the Trump administration come up with another fiscal rescue package before Congress goes on its August recess. Enditem