U.S. economy shrinks 4.8%

U.S. economy shrinks 4.8%

U.S. economy shrinks 4.8%

"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 Commerce Secretary Wilbur Ross.

"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 BEA explained in its press release. Consumer expenditures plummeted 7.6 percent in the first quarter as Americans "canceled, restricted, or redirected their spending" because of those restrictions, according to the feds.

The longest economic expansion in US history came to a shuddering halt in the first quarter as the coronavirus pandemic sent GDP tumbling into negative territory - with economists expecting far worse to come.

As the economy slides into what looks like a severe recession, some economists are holding out hope that a recovery will arrive quickly and robustly once the health crisis has been solved - what some call a V-shaped recovery.

Many Americans, they suggest, could remain too fearful to travel, shop at stores or visit restaurants or movie theatres anywhere near as much as they used to.

And housing showed a 21% increase in the first quarter, boosted by lower mortgage rates.

The announcement came as the Federal Reserve was wrapping up its regular two-day meeting.

France's economy posted a historic decline and entered a recession as gross domestic product shrank for the second consecutive quarter due to the coronavirus and the lockdown measures imposed to contain it.

A sharp rebound is expected in following quarters, leading the economy to shrink by 5.6 percent in 2020, the Congressional Budget Office said in its economic projections.

Bryson's projection was echoed by many, including White House economic advisor Kevin Hassett, who told CNBC earlier this week that the economy could contract up to 30 per cent in the second quarter.

The National Bureau of Economic Research, the private research institute regarded as the arbiter of USA recessions, does not define a recession as two consecutive quarters of decline in real GDP, as is the rule of thumb in many countries. The GDP fell by 8.4 percent in the October-December period of that year. Founded in 1916, we are a non-partisan, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States.

While declining imports helped narrow the trade deficit and contributed 1.30 percentage points to GDP last quarter, that meant no inventory was accumulated.

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