Nope, that ain’t it at all. They’re forecasting GDP to fall in Q2 at an *annualized rate* of 30%. That’s actually a quarterly decline of about 7%.

Annualized rates simply aren’t that relevant if you don’t anticipate them persisting for a year. https://twitter.com/reuters/status/1248066851596353536

I wonder how much of the “cure is worse than the disease” talk derives from folks who don’t understand that a -30% annualized rate of GDP growth that persists only one quarter is only a 7% decline, and a long way short of anything approaching the Great Depression.

Don’t lemme confuse you: Our economic woes are serious. But they’re not Great Depression GDP-fell-by-25%-and-remained-below-earlier-levels-for-7-years-followed-by-a-double-dip-in-1937 serious. L

Currently we are a long way from anything like that. (Currently!)

A note of explanation: When GDP falls by 7% in a single quarter, the official statistics report the result of a thought experiment: “If this persisted all year, what would happen to GDP?

Thus they report (100%-7%)^4-1 = -25%. This isn’t saying GDP fell 25% but rather it fell 7%.

Also, don’t tweet while snuggling your kids to bed or you’ll make the mistake I just made: A 30% annualized rate of decline over one quarter is an 8.5% fall (not the 7% I stated above, which corresponds to a 25% annualized rate).
https://twitter.com/drchriscaton/status/1248076284225191938?s=21 https://twitter.com/drchriscaton/status/1248076284225191938