Joblessness remains high as GDP falls short
Federal economic data released Thursday did little to alleviate concerns over the U.S. economy, as unemployment remains elevated and new GDP numbers disappointed experts.
The Department of Commerce released Gross Domestic Product data Thursday showing it grew 6.5% from April to June, nearly two percentage points below what experts predicted. That number was slightly better than the 6.3% growth from the previous quarter.
The GDP has now reached pre-pandemic levels but remains below the post-pandemic bounce analysts predicted.
“Disposable personal income decreased $1.42 trillion, or 26.1 percent, in the second quarter, in contrast to an increase of $2.27 trillion, or 63.7 percent (revised), in the first quarter,” the federal agency said. “Real disposable personal income decreased 30.6 percent, in contrast to an increase of 57.6 percent.”
The Department of Labor also released new weekly unemployment numbers that show first-time unemployment claims fell compared to the previous week but still remain higher than at other points this year. The number of new weekly first-time filers is nearly double the same time in 2019, before the pandemic.
“In the week ending July 24, the advance figure for seasonally adjusted initial claims was 400,000, a decrease of 24,000 from the previous week’s revised level,” the Department of Labor said.
Ongoing unemployment claims increased but are lower than the heart of the pandemic shutdowns.
“The total number of continued weeks claimed for benefits in all programs for the week ending July 10 was 13,156,252, an increase of 582,403 from the previous week,” the Department of Labor said. “There were 31,898,353 weekly claims filed for benefits in all programs in the comparable week in 2020.”
The mixed economic numbers come as fears escalate over the potential for more shutdowns as mask mandates are making a return nationwide.
Any shutdowns would likely allay hopes analysts have that jobs and GDP would bounce back after a return to economic normalcy.
“The increase in real GDP in the second quarter reflected increases in personal consumption expenditures (PCE), nonresidential fixed investment, exports, and state and local government spending that were partly offset by decreases in private inventory investment, residential fixed investment, and federal government spending,” the Department of Commerce said.
According to Commerce Department data released in May, international trade in goods and services dropped by $71.2 billion and personal income dropped 2%.
All these economic figures come as other federal data also show the steady rise of inflation, which has increased the price of goods well above normal levels in the last twelve months.
While critics pointed out the GDP did not meet expectations, Biden touted the growth Thursday.
“America is on the move again, and today’s new GDP numbers put our economy back at pre-pandemic levels,” Biden said. “Make no mistake: this growth is no accident, it’s a direct result of our efforts to deliver economic relief to families, small businesses, and communities across the country.”
Treasury Secretary Janet Yellen pointed to the GDP reaching pre-pandemic levels after a major dip during the pandemic shutdowns.
“Today’s GDP numbers are a welcome milestone,” Yellen said.
This article was originally posted on Joblessness remains high as GDP falls short