The US economy shrank at a 32.9% yearly rate among April and June as the nation wrestled with lockdowns and spending reductions during the coronavirus pandemic.
It was the most profound decay since the government started keeping records in 1947 and multiple times more extreme than the earlier record of 10% set in 1958.
Diminished spending on administrations, for example, medicinal services drove the fall.
Economists have said they expected to see the sharpest drop in the second quarter, with recovery thereafter.
But as virus cases in the US surge and some areas re-impose restrictions on activity, the rebound is showing signs of stalling.
More than 1.4 million people filed new claims for unemployment last week, up slightly from the prior week for the second week in a row. Other data points to spending cuts and falls in confidence in July.
The US has lost nearly 15 million jobs since February, despite strong hiring in May and June. The US census estimates more than half of American adults live in households that have seen incomes cut since the pandemic.
Economists warned it will take years for the US to recover from the devastation.
“Even when the economy saw rapid bounce-back in May and June, the Covid-19 economic shock inflicted so much damage in earlier months that the net result was an economic catastrophe for the second quarter,” wrote Josh Bivens, director of research at the Economic Policy Institute.
“The way that underlying jobless cases have ascended for a subsequent week is stressing and underscores that the early utilization recuperation is in danger,” said Madhavi Bokil, VP of Moody’s Investors Service.
Source : BBC