The gross domestic product (GDP) of U.S recorded a annualized contraction in the second quarter of the year of 32.9% as a consequence of the impact of the pandemic of the covid-19, compared to the 5% drop observed in the previous quarter, according to the first estimate of the data presented this Thursday by the Government’s Economic Analysis Office (BEA).
The agency, however, has warned that the full economic effects of the pandemic cannot be quantifiedAs the data on which it is based is still incomplete and will take time to update. Furthermore, a large part of the containment measures decreed in March and April began to be lifted in May and June, which caused a certain acceleration in economic activity.
Unprecedented in Recent American History that equals a contraction as severe as that registered in the second quarter. Since the historical series began in 1948, the largest decline was observed in the first quarter of 1958, when the decline was 10%.
The biggest drop in the previous crisis, of 8.4%
During the last recession, the biggest decrease was recorded in the fourth quarter of 2008, when GDP registered an annualized drop of 8.4%.
Practically all components of GDP recorded negative data in the second quarter. Household spending contracted 34.6% between April and June in annualized data, compared to the 6.9% decrease in the first quarter. This is the worst reading of the data since there are records. Spending on goods fell 11.3%, while spending on services plummeted 43.5%.
On their side, business investment fell by 27%, compared to the 6.7% drop in the first quarter. This represents the worst reading of the data since the third quarter of 1952. Specifically, investment in structures fell 34.9%, while investment in equipment fell 37.7% and investment in intellectual property decreased 7 ,two%.
In addition, the Office has broken down that Americans’ disposable personal income rose 42.1% in the quarter, which is the best figure in the historical series. Likewise, the savings rate tripled, to 25.7%.