The U.S. economy declined in the first quarter of 2020 due to the impact of the COVID-19 pandemic. Consumer spending, gross private domestic investment, exports and imports all decreased.
According to the “advance” estimate released by the Bureau of Economic Analysis (BEA), real gross domestic product (GDP) decreased at an annual rate of 4.8% in the first quarter of 2020, following a 2.1% increase in the fourth quarter of 2019 and somewhat worse than NAHB’s forecast of -3.8%. This quarter’s figure marked the first negative growth rate since the first quarter of 2014 and the steepest drop since the first quarter of 2009. The longest economic expansion in history, unfortunately, has come to an end.
The “advance” GDP estimate for the first quarter did not reflect the full economic effects of the COVID-19 pandemic. The BEA mentioned that “stay-at-home” orders in March “led to rapid changes in demand, as businesses and schools switched to remote work or canceled operations, and consumers canceled, restricted, or redirected their spending. The full economic effects of the COVID-19 pandemic cannot be quantified in the GDP estimate for the first quarter of 2020 because the impacts are generally embedded in source data and cannot be
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