by Calculated Risk on 8/22/2020 09:35:00 AM

From Merrill Lynch:

2Q GDP is likely to be revised up to -32% qoq saar in the second release. We are tracking 17% for 3Q GDP. [August 17 estimate]
emphasis added

From the NY Fed Nowcasting Report

The New York Fed Staff Nowcast stands at 14.6% for 2020:Q3. [August 21 estimate]

And from the Altanta Fed: GDPNow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2020 is 25.6 percent on August 18, down from 26.2 percent on August 14. [August 18 estimate]

It is important to note that GDP is reported at a seasonally adjusted annual rate (SAAR). A 15% annualized increase in GDP is about 3.6% quarter-over-quarter (QoQ). Also, a 15% annualized increase would leave real GDP down about 7.5% from Q4 2019.

A 25% annualized increase in Q3 GDP, is about 5.7% QoQ, and would leave real GDP down about 5.5% from Q4 2019.

The following graph illustrates these declines.

Click on graph for larger image.

This graph shows the percent decline in real GDP from the previous peak (currently the previous peak was in Q4 2019).

This graph is through Q2 2020, and real GDP is currently off 10.6% from the previous peak.  For comparison, at the depth of the Great Recession, real GDP was down 4.0% from the previous peak.

The two black arrows show what a 15% or 25% annualized increase in real GDP would look like in Q3.

Even with a 25% annualized increase (about 5.7% QoQ), real GDP will be down about 5.5% from Q4 2019; a larger decline in real GDP than at the depth of the Great Recession.