US gross domestic product (GDP) declined at an annual rate of 32.9% in the second quarter, just slightly less negative than the consensus forecast of -35.0% but the largest decline on record. This follows a 5.0% annualized decline in first quarter GDP. Personal consumption expenditures plunged 34.6% in the second quarter, following a 6.9% decline in the first quarter. Altogether, US GDP declined 10.8% in the first half of 2020. By comparison, US GDP declined 3.3% between August 2008 to July 2009, during the financial crisis. While the collapse in second quarter GDP was fast and deep, market participants essentially shrugged off the GDP report this week and remain focused on the outlook. We believe the outlook for economic activity is largely dependent on the course of the pandemic, the amount of additional fiscal relief from the government, and the timeline for a vaccine. Congress is currently negotiating another round of fiscal relief, including a potential extension of the expanded unemployment benefits which expire today. Meanwhile, two US drug makers began phase 3 human clinical trials for a COVID-19 vaccine this week and hopes for approval of a vaccine (at least for emergency use) by year-end are high. The consensus forecast calls for a fairly strong rebound in consumer spending and overall economic activity in the third quarter (+23.9% and +18.0%, respectively), and a slowing pace of improvement in activity thereafter. Year-to-date, the S&P 500 is flat as the US equity market has nearly recovered all of its pandemic-fueled decline and the worst of the economic data appears to be in the rearview mirror.