U.S. | 2Q20 GDP: Worst quarter on record overshadowed by strengthening pandemic headwinds

Summary

GDP dropped by 32.9% in the second quarter, marking the steepest decline in over-the-quarter growth since 1937. The rise in the number of COVID-19 cases since mid-June has lowered the likelihood of the “V-shaped” recovery. Economic and health outcomes will be interwoven in the near future.

Key points

• Key points:
• Given that growth for the 1H20 has been perfectly aligned with our outlook since April, we are maintaining our expectations for growth in 2020 of -5.1%
• The idiosyncrasies of the Covid-19 pandemic have led to unusual fluctuations in consumption and investment that could endure in some sectors
• Recent spikes in the number of Covid-19 in hotspots around the country and the shift to more cautious behavioral responses suggests that the risks are firmly titled to the downside

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