Agenda - 02-16-2021; 12-3 - Memorandum - Financial Report-Second Quarter FY 2020-21

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Quarterly Growth Rates In Real GSP 2020 GSP 12 Gross State Product (GSP) is expected to reach a level of $560,309.2 20- million in 2020. Real (inflation-adjusted) GSP is expected to decrease by 9- 27.0 3.4 percent over the 2019 level. The Covid-19 shutdown in earl 2020 6- p y 3- 6 ended the ten plus year economic expansion that the North Carolina 0 -3.0 5 economy had experienced since 2010. 3- 6- For 2020, first quarter GSP decreased by an annualized real rate of 3.0 9- -'0.5 percent as the Covid-19 response slowly kicked in. During the second 12- quarter, GSP decreased by an annualized real rate of 30.5 percent, during 30- which the U.S. economy was essentially shutdown by government action. In the third quarter, GSP is expected to increase by an annualized real rate 2020 I 2020 II 2020 III 2020 IV of 27.0 percent as recovery begins. In the fourth quarter of 2020, GSP is 2020 Highlights expected to increase by an annualized real rate of 5.6 percent. 2020` Percent The North Carolina economy, like the U.S. economy, experienced its Current Dollars Change biggest decline in GDP since the Great Depression of the 1930s. The Total Gross Product 560,309.2 -2.1 decline was caused not by an economic disequilibrium, but by a designed Constant(2012 Dollars) action by the government to shutdown normal economic interaction to Total Gross Product 495806.9 -3.4 save lives in response to an unprecedented pandemic. Not since the Agricultural 5785.0 5.8 Spanish Flu pandemic of 1918 have we seen anything approaching this Mining 660.5 4.4 year's health crisis. However, in 1918 scientists did not understand as Construction 19,123.6 -2.0 much about viral spread as we do today, and shutting down the economy Manufacturing 87,098.7 -4.8 Durable Goods 39,462.E - .3 and social distancing were not considered. In fact,because of the weapons Nondurable Goods 47,636.1 -0.8 production associated with World War I, the U.S. economy actually TWU 19,123.6 -1.9 expanded during 1918. Wholesale Trade 29,486.4 -0.6 Retail Trade 28,341.8 -3.7 Information 22,444.1 -1.7 Going forward from the middle of 2020, the number one question is how FIRE 92,379.58 0.3 long before the economy gets back to its 2019 level and will the s&P 67,252.6 -1.1 unemployment rate again approach "full employment." Given the E&H 39,477.8 -6.9 devastating hit the economy took during the second quarter of 2020, it is H&L 11,987.6 -33.9 likely to take until late 2021 before GDP reaches the 2019 quarter 4 high Services 7 8,87 .8 -10.7 Government 6 ,8 . -0. point. Unfortunately, the unemployment rate will take another 6 to 9 months before it again approaches 4.0 percent. *millions of dollars