Posted on 05/21/2020 11:47:03 AM PDT by SeekAndFind
White House economic adviser Larry Kudlow said that, as America’s economy opens up, output in the third quarter could surge by 21.5 percent, which he said, if it materializes, would make it “the biggest growth quarter in American history.”
Kudlow, speaking at a White House meeting Wednesday with the governors of Arkansas and Kansas, based his comments on revised economic estimates by the Congressional Budget Office, which predicted a second-quarter annualized contraction of 37.7 percent that the presidential adviser called a “predictably rough pandemic contraction.”
As states have imposed restrictions on work and travel, the second quarter of 2020 has been widely predicted to be the worst in American history, with Federal Reserve Chairman Jerome Powell recently estimating gross domestic product (GDP) in Q2 would fall by between 30 and 40 percent.
But as states begin to lift lockdowns, there are signs of green shoots in the economy.
Arkansas Gov. Asa Hutchinson, a Republican, told President Donald Trump at the meeting that his state is “back to work” and that the state’s sales tax revenue will likely bounce back faster than expected.
“We’re back to work today. All of our retail stores are open, all of our retail establishments totally are open, our gyms are open. Our barbers are open, our restaurants,” Hutchinson said, adding that some restrictions like limits on occupancy remained in place.
“We’re emphasizing associate social distancing, but we’re at work,” he said.
For that reason, Hutchinson said he now projects the state’s sales tax revenue will be down only 5 percent, not the 10 percent he earlier projected.
“We’re going to open up. I call it ‘transition to greatness,'” Trump said, adding, “and when Larry Kudlow tells you the numbers, those are really surprisingly good numbers.”
(Excerpt) Read more at theepochtimes.com ...
Maybe in Red states, Dem Govs still in lockdown.
Kind of a cheap argument to make, but true nonetheless.
translation: Relax, Trump has a plan to deal with Blue State Govs who won’t reopen.
Everyone here (industries and businesses) are spring-loaded and ready to JUMP!
The recovery will be epic and Michigan (GM, Ford, New Dow, DuPont) will charge out of the gate.
It would be perfect timing for the election
And they will be til Nov 4th
If you kink a hose.... then unkink it, what happens?
It’s nice seeing our side saying them though
Got sick of 25 years of apologizing
I’m less sanguine about the recovery. Many people have no cash reserve left and won’t find their jobs waiting for them when they are allowed to have their constitutional rights back temporarily (until dems invent a new crisis and demand them again, now that they know they can). So who’s going to fuel this big expansion?
agree
So who’s going to fuel this big expansion?
____________________________________________
I think you underestimate people’s cash reserves. We have had 9 weeks of shutdown. People received pay at the end of weeks 1&2. By week 6, people had increased unemployment compensation and $1200/per person stimulus $. Companies could continue to pay those not furloughed.
Everyone received the $1200 (or less if they made more income) and had nowhere to spend it. Most could not be evicted and could pay rent over time. Gas is cheap and there was nowhere to go. The market rebounded by week 7. Taxes are deferred to summer and fall. People can take loans from their IRAs with deferred, lowered interest, no penalty terms. Any retail store could and did sell at curbside by week 4 and some went online. Small manufacturers and farmers set up online sales portals, instituted delivery to curbside and set up drop off sites in larger cities. Grocery stores boomed. People opted for DIY rather than hire someone and that saved cash. Personally, we received a credit on our car insurance and on our Internet subscription (because they could not make a home service call). I shipped one average order a week before shutdown. The account was shut down for 4 weeks but my invoice was paid on time. I had one large order that shipped 4 weeks late, so that invoice will be paid a month later than planned. That account shut down for 4 weeks.
Real estate was back in business by weeks 3-4. Banks stayed open by appointment & drive thru. There were underground personal services and home service all the way thru. Cars were bought and sold.
You Tubers put out specialized content for Patreon members. Grants proliferated throughout the art community. Vets stayed open. Pet day care set up curbside arrival and delivery and stayed open. Online sales boomed, as did trucking. Essential factories ran 3 shifts 6 days/week & cancelled vacations.
Maybe 10% of the most marginal workers only saw the $1200 and that was likely more than they would have earned in a month.
That’s off the top and my personal knowledge. My bet is that cash is smoldering in bank accounts and waiting to be spent.
-——So who’s going to fuel this big expansion?-——
By my windshield survey just now, the expansion is presently underway.
The evidence is plain to see and is in the form of 18 wheelers on Interstate 81. Forbes declared I 81 to be the heaviest freight bearing interstate in the country. Today it is heavily traveled by normal or perhaps more trucks than usual.
The interstate travel is heavy although the various RV/trailers are totally absent.
Relax, Trump has a plan to deal with Blue State Govs who won’t reopen.
What do you think his plan is? Trump has rightly delegated the authority to open or close states to the governors in accordance with the 10th Amendment. Whatever his plan is hopefully it takes into account the many good conservative people who live in blue states.
Kudlow notwithstanding, if our trip to Van Buren today was any indicator the economy will bounce back. I never saw so many friggin’ people shopping at the big box stores on a Thursday. I think everybody was out and found people to bring with them.
Exactly. And if you keep pushing water into the hose what happens? The stimulus money will go somewhere. Looks like it is being spent at Lowes and Home Depot.
Data point from South Jersey: We have WaWa convenience stores here. They get a ton of traffic, always lots of cars in the lot. For the past five weeks or so when I drove by them, ghost towns. Maybe one car parked out front. Yesterday I passed two on my way somewhere and both parking areas were full. People aren't frightened anymore.
I vaguely recall some leeway on student loans....maybe the interest? Deferred, IIRC.
Something similar for some mortgages, if FreddyMac/FannyMae.
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