The U.S. economy shrank over the last quarter by a historic 32.9 percent.
The Washington Examiner reports “the contraction in the second quarter is presented at an annual rate” so it appears larger than the actual decline in economic activity.
#BREAKING: US GDP takes nosedive.
— Washington Examiner (@dcexaminer) July 30, 2020
According to the report, the data reported by the Bureau of Economic Analysis reported Thursday “represents the economic activity that took place between April and June as occurring for a full year.”
The near 33 percent is unprecedented but, comparing it to the first quarter, the economy only contracted 9.5 percent.
Second quarter GDP down 32.9% at annualized rate.
— Neil Irwin (@Neil_Irwin) July 30, 2020
This actual figure—not the annualized figure—is among the highest drops in U.S. history, next to the 2008 Great Recession and a drop in 1958. From the Washington Examiner:
The negative growth in the second quarter comes on the heels of the economy contracting at a 5% annual rate in the first quarter.
The contraction in Thursday’s report is by far the largest in U.S. history. Until now, the largest drop in GDP was at a 10% rate in 1958, according to the Commerce Department’s Bureau of Economic Analysis.
The largest drop in GDP during the Great Recession from 2007 to 2009 was 8.4%.
Economists expected a contraction of 34%, at an annual pace, from the start of April to the end of June.
During a press conference on Wednesday, Federal Reserve Chairman Jerome Powell said the economy will continue to be negatively impacted as people are fearful to return to work. Several others, who will defiantly face the coronavirus pandemic, are being prevented by their state and local governments.
“People aren’t going out to restaurants, bars, gas stations, pharmacies, and salons,” he said via the report.
BREAKING: U.S. economy shrank at a record-breaking 33% rate last quarter as virus shuttered businesses and triggered layoffs. https://t.co/M12Q6Wz0lD
— The Associated Press (@AP) July 30, 2020