Thursday, 30 Jul 2020 08:51 PM MYT
The bulk of the historic plunge in gross domestic product reported by the Commerce Department today occurred in April when activity almost ground to an abrupt halt after restaurants, bars and factories among others were shuttered in mid-March to slow the spread of coronavirus. Gross domestic product collapsed at a 32.9 per cent annualised rate last quarter, the deepest decline in output since the government started keeping records in 1947. The drop in GDP was more than triple the previous all-time decline of 10 per cent in the second quarter of 1958. The economy contracted at a 5.0 per cent pace in the first quarter. It fell into recession in February.
Though activity picked up starting in May, momentum has slowed amid a resurgence in new cases of the respiratory illness, especially in the densely populated South and West regions where authorities in hard-hit areas are closing businesses again or pausing reopenings. That has tempered hopes of a sharp rebound in growth in the third quarter.
This, together with the sky-rocketing coronavirus infections is keeping layoffs elevated. In a separate report today, the Labor Department said initial claims for unemployment benefits increased 12,000 to a seasonally adjusted 1.434 million in the week ending July 25. A staggering 30.2 million Americans were receiving unemployment checks in the week ending July 11.