US GDP Fell 31.4% YoY in the Q2, Better than Expected

USD GDP fell 31.4% year-on-year in the second quarter, better than expected. The figure improves slightly compared to the 31.7% drop in the previous review. But even so, it remains a historical collapse, unparalleled in peacetime for the world’s largest economy.

This data has improved by three-tenths of the previous publication of GDP. Bloomberg’s analysts did not expect such an improvement and had predicted that GDP would remain with the annualized fall of 31.7%.

Despite the announced improvements, the decline in real GDP reflected decreases in PCE, exports, private inventory investment, nonresidential fixed investment, residential fixed investment, and state and local government spending partially offset by an increase in the federal government’s spending. Imports, which are a reduction in the calculation of GDP, also registered falls.

US private sector created 749,000 jobs last month

On the other hand, this Wednesday, the United States economy created 749,000 jobs in the private sector in September, according to the National Employment Report prepared by the consultancy ADP. The figure turned out higher than anticipated by experts. They expected the creation of 650,000 jobs. The number is massive compared to August’s job creation figures, totaling 481,000 jobs. Meanwhile, an initial estimate was 428,000.

Despite the increases registered every month since May, the labor market still struggles to recover from the record-breaking 19.4 million jobs demolished in April from the impact of the covid-19 calamity.  

Ahu Yildirmaz, the co-head of the ADP Research Institute, said that the labor market gradually recovers.

Large businesses, with at least 500 workers, are the ones that added the most jobs, with an increase of 297,000. Medium companies, between 50 and 499 employees, added 259,000 jobs. Meanwhile, small businesses, with a maximum of 49 employees, registered a 192,000 increase in employment. Mr. Yildirmaz mentioned that small businesses continued to demonstrate slower growth.

Almost all sectors saw job creation. The service-providing sector added 552,000 jobs, and the goods-producing sector created 196,000 jobs.

Trade, transportation, and utilities gained the most. They created 186,000 jobs. 

Health care and social assistance generated 101,000 new jobs. 

The ADP Research Institute conducted the report along with Moody’s Analytics. On Friday, the US Department of Labor is expected to release its September employment report, which includes the same period as the ADP National Employment Report.