The record-long U.S. expansion is likely over as gross domestic product (GDP) declined for the first time since March of 2014. GDP shrank at a 4.8% annualized rate in the first quarter, as the COVID-19 pandemic shuttered economic activity. With dire estimates for the second quarter, the first-quarter figure effectively confirms that a recession has started.
The past two months have changed both the way we look at the economic landscape as well as the world around us. We have been faced with unprecedented moves in the market, both in speed and in magnitude. Economies are facing a depression-like demand shock combined with a category five hurricane supply shock of which the repercussions are only now starting to be known. All being said, the combination of optimism on the health front and an unprecedented fiscal and monetary response has calmed global markets and improved investment psyche.
Disclosure: This Commentary represents a review of topics of possible interest to Pennsylvania Trust’s clients and is not personalized investment advice. It contains Pennsylvania Trust’s opinions, which may change following the date of publication. Information obtained from third-party sources is assumed to be reliable but is not guaranteed. No outcome — including performance — is guaranteed, due to various uncertainties and risks. This document is not a recommendation of any particular investment. Investment decisions for clients are made on an individualized basis and may be different from what is expressed here. Past performance is no guarantee of future results.