during 2020 the us economy was on a roller coaster gdp plunged 50 and 314 in the first and second quarters respectively and then almost climbed out of the hole by growing 334 and 43 in the third and fourth quarters respectively total economic output decreased 35 for the year the 2021 first quarter’s gdp growth of 63 erased the economic downturn from 2020’s recession its gdp of 2204 billion surpassed the previous high in 2019’s fourth quarter of 2169 billion the bureau of economic analysis or bea’s second estimate for the june quarter’s gdp showed the economy continuing to rebound as the covid19 vaccine rolled out growth increased slightly from 65 in the first estimate to 66 however the delta variant could negatively impact the strength of the recovery the federal reserve bank of atlanta publishes data and a graph that estimates the gdp growth rate of the current quarter it also includes the top and bottom 10 forecasts from the blue chip economic indicators and blue chip financial forecasts keep in mind the atlanta fed’s gdpnow projection is based on a formula from previous quarters’ gdp and the impact of covid19 could be having a material influence on its estimate the gdpnow model is estimating the september quarter to have 51 growth down from 61 the previous week the blue chip consensus projections have a wide range of just over 5 to a bit more than 9 for september quarter’s gdp growth note that the blue chip estimates in this graph may lag their current forecasts it would not be surprising to see their current outlook be lower than what is portrayed here the new york federal reserve publishes a “weekly economic index” which is comprised of ten daily and weekly economic activity indicators its report from yesterday has the economy growing faster than the atlanta fed’s gdpnow calculation however its weekly estimate has been declining since late april and the 13week moving average turned down in june where the delta variant could be having an impact this chart from twitter is from oren klachkin lead economist at oxford economics and shows the us economy in five geographic regions in the tweet he wrote “the south is now the weakest region according to our state recovery trackers rapidly deteriorating health conditions have stalled its mobility activity and employment recoveries louisiana and mississippi have recorded the sharpest drops since the delta variant began spreading” this shouldn’t be too surprising given the marked increase in these states coronavirus cases in a series of tweets from gregory daco chief us economist for oxford economics he shows that there was a slight uptick in thursday’s unemployment claims while there is one more week until the august employment report is released on friday september 3 the surveys for the report were done during the week of august 12 if initial and continuing claims remain flat it could portend weaker job growth in september the university of michigan’s consumer sentiment estimate for august tumbled it fell from 812 in july to 703 in august even lower than the early pandemic month of april 2020’s 718 richard curtin surveys of consumers chief economist said “the august freefall in confidence was in response to mounting issues including rising inflation small wage gains and slower declines in unemployment the falloff also reflected an emotional response to people’s dashed hopes that the pandemic would soon end and lives could get back to normal this is not the first time emotion has partly determined economic behavior twenty years ago the terrorist attacks on 911 led to an emotional retrenchment in spending although economic expectations improved by yearend the emotional impact on spending patterns lasted much longer the same type of persistent impact is now likely to reoccur” the graph below from the daily shot shows consumer sentiment going back to 2005 and that the last time sentiment was this low was around 2012 as the economy recovered from the great recession note that this graph has august’s preliminary estimate of 702 vs the final reading of 703