In a steep decline due to COVID-19, US Real Gross Domestic Product (GDP) decreased at an annual rate of 32.9 percent in the second quarter of 2020, according to the “advance” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased by 5.0 percent.
In dollars, that’s a drop of about $2.15 trillion. The gross domestic product contracted 9.5%, the fastest pace on record and comparable only to events such as the Great Recession in its severity.
Current‑dollar GDP decreased 34.3 percent, or $2.15 trillion, in the second quarter to a level of $19.41 trillion. In the first quarter, GDP decreased by 3.4 percent, or $186.3 billion.
(Image Source: U.S. Bureau of Economic Analysis)
The decline in second-quarter GDP is attributed to COVID-19 “stay-at-home” orders issued in March and April. The ‘stay at home’ orders were partially lifted in some places in parts of the country in May and June, and government additional unemployment benefits were distributed to households and businesses.
The U.S economy showed improvement in May, and the employment rate fell to 11 percent in June. The advance seasonally adjusted insured unemployment rate was 11.6 percent for the week ending July 18, an increase of 0.5 percentage point from the previous week’s unrevised rate.
Economists expect the GDP to improve later this year, but at present, it looks very clouded with the number of coronavirus cases going up across the US.