U.S. GDP Growth and Initial Jobless Claims Bring Small Smiles

There have been two important U.S. economic data releases today: (1) advance estimates of Q4 and full year 2020 gross domestic product (GDP) growth; and (2) the latest weekly initial jobless claims number.

Both are set out in the standalone graphs below.

U.S. ‘real’ (after adjustment for inflation) GDP was +4.0% period to period annualized in Q4 2020, not so bad considering it was down by nearly a third (-31.4%) in 2020’s Q2.  

More interesting, though, annual 2020 GDP was -3.5% vs 2019, not as steep a decline as was expected back in the Spring of last year.

In fact, -3.5% appears tame when compared with -11.6% in 1946, when WWII weaponry production ceased, and -12.9% in 1932, during the cold heart of the Great Depression.

Also, initial jobless claims delivered a result that was modestly upbeat. The latest weekly number on first-time unemployment insurance seekers moved in the right direction again, downwards.

It fell by -67,000 to 847,000, after climbing back up near a million in the prior week.

The number of ongoing UI recipients also took a step back, from 4.974 million to 4.771 million.

With a few fortuitous breaks along the way, especially on the vaccine roll-out front, 2021 may serve up a whole lot smoother ‘ride’ than we experienced in 2020.

Alex Carrick is Chief Economist for ConstructConnect. He has delivered presentations throughout North America on the U.S., Canadian and world construction outlooks. Mr. Carrick has been with the company since 1985. Links to his numerous articles are featured on Twitter @ConstructConnx, which has 50,000 followers.