By Geoffrey Smith
Investing.com — U.S. stock markets opened markedly lower on Thursday, an hour after the U.S. reported its biggest quarterly economic contraction since records began.
Gross domestic product contracted by 9.5% in absolute terms in the three months through June. Extrapolating that over a full year would give a contraction of 32.9%, although that figure is largely meaningless, given that the lockdowns that caused the recession have since been lifted in large part.
At the same time, the Labor Department said that the number of Americans making initial claims for jobless benefits rose for the second straight week, albeit by only 12,000 to 1.434 million. Continuing claims, which are reported with a one-week lag, also rose.
By 9:35 AM ET (1335 GMT), the was down 343 points or 1.3% at 26,197 points. The was down 1.0%, while the was down 0.6%.
Although “significant”, the GDP number “tells us little about where we stand today and where we’re likely to head tomorrow,” Oxford Economics analyst Greg Daco said via Twitter.
Related or not, the gloomy news from the economic front was followed within minutes by a suggestion from President Donald Trump’ that the November presidential election be delayed. Trump repeated, without any fresh evidence, his past claims that the wider use of mail-in voting will lead to electoral fraud. Twitter has previously flagged such claims as misleading. The U.S. Constitution entrusts the organization of federal elections to the states, meaning that Trump – who is trailing his Democrat rival Joe Biden in most nationwide opinion polls – has no power to force a delay.
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