It didn't. It contracted by 9.5% in Q2, which, if repeated for four consecutive quarters, would become 32.9%.
Annualized figures might make sense in ordinary times, but these are not ordinary times.
Annualized figures might make sense in ordinary times, but these are not ordinary times.
This is more like the general populace not understanding how finance works rather than the finance press exaggerating the number.
That figure (32.9%) is based on future projections. Stating the predicted future as something that took place already would get someone fired in finance.
>> This is more like the general populace not understanding how finance works
It looks to me more closely as someone applying mathematical formulas either without understanding what you are doing de-facto behind them, or being ill intended in the first place to manipulate the market. Either way, it's bad.
Unless you're explicitly writing "in Q2, the GDP dropped at an annualized rate of -33%", you're committing the capital offense when it comes to writing good journalism: not knowing your average audience, not adapting your content to the audience and probably most significantly, not understanding as a journalist what you're writing about.
Actually it looks like just the HN headline is wrong. The article states it correctly.
It's typical for us in the HN crowd to have a superficial knowledge of a domain and get lost in quibbling about the minutae of how the data is represented, but the thesis of this article is the record decline, and focusing on the use of the annualized metric feels like a tangent.
How exactly annualization works?
.905^4 = .671
1-.671 = .329 = 32.9%
Thanks for the clarification in grandparent comment, i wasn't aware.
Edit: I assumed it was compared to the second quarter 2019, not sequentially to the first quarter 2020, I didn’t stop to think that 33% was just too much. 9% is bad enough: from $21.34 trillion to $19.41 trillion (Q2 2019 to Q2 2020).
@Dang? add "annualised" or "annual rate"?
U.S. economic output fell 9.5 percent in the second quarter, the biggest drop on record. That translates to a 32.9 percent annual rate of decline.