The U.S. Economy – what caught my eye this week: revised GDP figures for the second quarter, new unemployment claims, and the revised monetary policy strategy of the Fed

The U.S. Economy – what caught my eye this week: revised GDP figures for the second quarter, new unemployment claims, and the revised monetary policy strategy of the Fed

According to revised figures published by the Bureau of Economic Analysis (BEA), the U.S. economy contracted at a rate of 31.7 percent (in an earlier estimate published in the end of July, the BEA had published a decrease of 32.9 percent).

https://www.bea.gov/news/2020/gross-domestic-product-2nd-quarter-2020-second-estimate-corporate-profits-2nd-quarter

The Federal Reserve revised its monetary policy strategy and adopts “average inflation targeting”. The target inflation rate is still two percent:

https://www.reuters.com/article/us-usa-fed-jacksonhole/in-landmark-shift-fed-rewrites-approach-to-inflation-labor-market-idUSKBN25N0HM

And here is the event and the video where Jay Powell made the announcement:

https://www.kansascityfed.org/publications/research/escp/symposiums/escp-2020

1’006’000 Americans registered to claim for jobless benefits in the week ending on August 22, a decrease of 98’000 compared to the week before:

https://www.dol.gov/newsroom/releases/eta/eta20200827

The Chicago Fed National Activity Index declined in July, but still indicates above-average economic growth:

https://www.chicagofed.org/publications/cfnai/index

How Did U.S. Consumers Use Their Stimulus Payments? Olivier Coibion, Yuriy Gorodnichenko, Michael Weber find that “Most respondents report that they primarily saved or paid down debts with their transfers, with only about 15 percent reporting that they mostly spent it. When providing a detailed breakdown of how they used their checks, individuals report having spent or planning to spend only around 40 percent of the total transfer on average.”

https://www.nber.org/papers/w27693

Unemployment in the United States dramatically increased between February and April (it has partially recovered since then but remains high). Which jobs were hardest hit?

https://www.stlouisfed.org/publications/regional-economist/third-quarter-2020/jobs-hit-hardest-covid-19

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