The U.S. economy fell at its fastest pace on record in the second quarter of 2020 as economic activities were canceled or restricted amid the COVID-19 pandemic. The economy will start to bounce back as restrictions are lifted and economic activities increase.
According to the “advance” estimate released by the Bureau of Economic Analysis (BEA), real gross domestic product (GDP) decreased at an annual rate of 32.9% in the second quarter of 2020, following a 5.0% increase in the first quarter of 2020 and close to NAHB’s forecast of -34.2%. This quarter’s figure marked the second negative growth rate amid the COVID-19 pandemic and it was the worst contraction ever on record, based on BEA data back to 1947. The 5.0% drop in the first quarter of 2020 captured the business shutdown in March, while the second-quarter’s deep drop reflected almost completely shutdown for half of the quarter and the slow reopening for the other half.
The “advance” GDP estimate for the second quarter did not reflect the full economic effects of the COVID-19 pandemic, because “the impacts are generally embedded in source data and cannot be separately identified”, mentioned in the BEA’s statement.
The decrease in real GDP
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