Buckle Up For Thursday's GDP Forecast: What To Expect

Second-quarter gross domestic product numbers will be released at 8:30 a.m. Thursday, July 30 by the Bureau of Economic Analysis.

Things To Remember About GDP: GDP is a calculation of all goods and services produced by a country in a given time frame.

Thursday’s data will include April through June of 2020, when much of the country and world was shut down by the coronavirus pandemic. 

In a Bloomberg poll, economists predict a 35% decrease in second-quarter GDP.

When the Bureau of Economic Analysis reports this data, it does so at an annualized rate.

The predicted 35% decrease does not necessarily mean the economy retracted by one-third.

This number is for the quarter and represents what the change would represent if carried out for an entire year.

With this being the first forecast, it will most likely have the most sticker shock for investors. Expect updated forecasts to come later that will provide a much clearer picture of the state of the economy.

The Context For Thursday's Report: Much of the economy's GDP is driven by consumer spending. This will be an important aspect to look at Thursday, as some states experienced much stricter shutdowns — so consumer spending changes fluctuated geographically.

The impact to consumer spending was somewhat damped by the federal unemployment benefits and stimulus checks that were paid out. 

Late May and June saw some economic rebound, and this rebound could help cushion the fallout seen in April and early June.

Unemployment numbers bounced back slightly faster than most economists expected, which could be a good sign. Employment means production is moving and consumers are more likely to spend.

Benzinga’s Take: The GDP decrease is going to be substantial no matter what. Recovery is going to depend on a lot of what the government does to help states and employers.

The Federal Reserve is wrapping up meetings Wednesday and is expected to keep interest rates close to zero.