WASHINGTON: The US economy's decade of expansion ended dramatically in the first quarter as the coronavirus pandemic caused GDP to shrink by 4.8 per cent, and second quarter growth is set to plummet even further.
The decline – the biggest fall in GDP in 12 years and slightly worse than analysts had expected – came after the pandemic forced businesses to close and halted purchases and investments, the Commerce Department said Wednesday (Apr 29).
Yet the report noted it could not quantify the full economic effects of the virus, and the figures are expected to sink well into the double digits in the second quarter, when the impacts from the shutdowns are fully felt.
"Thus ended the expansion which began in the third quarter of 2009; killed by COVID-19," Ian Shepherdson of Pantheon Macroeconomics said.
"But these data capture only the squall before the second quarter hurricane, so it's not going to change anyone's mind on the future trajectory of the economy."
The grim numbers underscore the damage done to the world's largest economy by the pandemic, which has already caused an estimated 26 million job losses and sent Congress and President Donald Trump scrambling to cut the losses.
The coronavirus outbreak in United States has grown into the world's largest and deadliest, with the country's caseload rising to 1,011,877 on Tuesday and deaths hitting 58,351.
A SHARP REVERSAL
Commerce Secretary Wilbur Ross acknowledged the numbers were "weak" but in line with expectations.
"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," Ross said in a statement, predicting the country would come back "stronger and healthier than ever".
In Washington, Democratic and Republican lawmakers are negotiating over aid to state and local governments after last month passing a massive US$2.2 trillion stimulus measure that included direct payments to Americans and loans and grants for struggling small businesses.
Meanwhile, states across the country are eyeing lifting lockdown measures, with Georgia recently allowing beaches and restaurants to reopen, though many other areas have committed to keeping the confinements in place for now.