WASHINGTON, D.C. – The total value of goods and services produced in the United States – gross domestic product (GDP) – declined by 32.9% in the last quarter, shrinking the economy by 10%.
The US economy’s second quarter was reportedly the worst in history as a lockdown to fight the dreaded coronavirus shuttered businesses and threw millions out of work. Real gross domestic product (GDP) decreased at an annual rate of 32.9 percent in the second quarter of 2020 (table 1), according to the “advance” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 5.0 percent.
The GDP estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see “Source Data for the Advance Estimate” on page 2). The “second” estimate for the second quarter, based on more complete data, will be released on August 27, 2020.
The outlook for the economy is not looking great at this time as as unemployment claims continue to roll in and many businesses remain stalled or partially shut. The novel coronavirus appears to remain the main culprit. Many Americans are choosing to stay home, activities are cancelled, movie theaters largely unopened, sports struggling to be played.
The decline in second quarter GDP reflected the response to COVID-19, as “stay-at-home” orders issued in March and April were partially lifted in some areas of the country in May and June, and government pandemic assistance payments were distributed to households and businesses. This led to rapid shifts in activity, as businesses and schools continued remote work and consumers and businesses canceled, restricted, or redirected their spending. The full economic effects of the COVID-19 pandemic cannot be quantified in the GDP estimate for the second quarter of 2020 because the impacts are generally embedded in source data and cannot be separately identified.
