A key measure of the economy is real GDP. As the NBER committee notes in their business cycle dating procedure:
The committee views real GDP as the single best measure of aggregate economic activity.
We are seeing forecasts of a 15% to 25% increase in annualized real GDP in Q3 2020.
It is important to note that GDP is reported at a seasonally adjusted annual rate (SAAR). A 15% annualized increase in GDP is about 3.6% quarter-over-quarter (QoQ). Also, a 15% annualized increase would leave real GDP down about 7.5% from Q4 2019.
A 25% annualized increase in Q3 GDP, is about 5.7% QoQ, and would leave real GDP down about 5.5% from Q4 2019.
The following graph illustrates these declines.
This graph shows the percent decline in real GDP from the previous peak (currently the previous peak was in Q4 2019).
This graph is through Q2 2020, and real GDP is currently off 10.6% from the previous peak. For comparison, at the depth of the Great Recession, real GDP was down 4.0% from the previous peak.
The two black arrows show what a 15% or 25% annualized increase in real GDP would look like in Q3.
Even with a 25% annualized increase (about 5.7% QoQ), real GDP will be down about 5.5% from Q4 2019; a larger decline in real GDP than at the depth of the Great Recession.