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Lower and lower: US GDP shows record fall

Economy
30.07.2020
140
Lower and lower: US GDP shows record fall

America’s GDP in the second quarter plummeted by a maximum 32.9% till the year. In the first quarter, for comparison, losses amounted to only 5%, the US Department of Commerce concluded.

The analytical summary of the department says that the current assessment doesn’t take into account all the data and will be repeated. The updated information on the quarter will be published on August 27.

Neither the Great Depression, nor the 2008 financial turmoil, nor any other crisis over the past two hundred years have led to such a significant economic collapse. For example, one of the worst quarterly results was recorded in 2008, when the drop in GDP was 8.4% after three last months of the year.

Although the economic collapse was the largest in the history of the country, it fell short of analysts’ expectations. For example, the Dow Jones Exchange survey assumed that the decline in GDP would be 34.7%. Mark Zandi, a leading economist at Moody’s Analytics, said that what was happening was like a black hole. According to him, the economy will take a long time to return to normal level.

Consumer spending and expenditures in the health sector were hit hardest, according to the report. Also, the share of personal income has increased. This was largely due to the support of the population by the US government. The income level grew sixfold to $1.39 trillion, while disposable income skyrocketed by 42.1% to $1.53 trillion.

The speed of economic recovery was slowed down by another jump in the number of patients with coronavirus. More cases of infection indicate the inability of the country’s government to contain the spread of COVID-19, which suggests that the country will take a very long time to recover. The longer doctors create a vaccine, the lower the US GDP will fall.

Author:Елена

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