GDP fell 4.8 per cent as nationwide lockdowns saw massive declines in personal consumption, exports, and private inventory investment
“The decline in first-quarter GDP was, in part, due to the response to the spread of COVID-19, as governments issued ‘stay-at-home’ orders in March,” the Bureau of Economic Analysis said in a statement. “This 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 separately identified.”
While the decline was not as bad as the 8.4 per cent plunge in 2008 during the worst of the GFC, and was partly offset by Washington’s multitrillion-dollar stimulus packages and state and local government spending, it’s still one of the worst figures yet to come out of the COVID-19 pandemic.
“Today’s GDP numbers are weak, but in line with expectations as a result of the COVID-19-driven disruptions to daily lives at home and around the globe that have rocked global markets and supply chains,” said Department of Commerce secretary Wilbur Ross. “We continue to have the most resilient economy in the world, driven by innovative and hardworking Americans who have shown that they are willing to make the needed sacrifices to defeat this invisible enemy.”
Meanwhile, US joblessness estimates jumped to more than 30 million as 3,830,654 people filed unemployment claims.
“As states begin the process of reopening and Americans return to work, today’s unemployment report reflects once again the hardship caused by the coronavirus pandemic,” said Department of Labor secretary Eugene Scalia. “The President’s actions and policies will continue to support American workers during this crisis. All 50 states are now delivering the $600 additional weekly unemployment benefit provided by the CARES Act.”
“The department has disbursed more than three-quarters of a billion dollars to states to help them deliver this relief as quickly as possible as Americans follow the guidance of public health officials to ‘slow the spread.’”
