Second-quarter GDP plunged by worst-ever 32.9% amid virus-induced shutdown

ECONOMY

Second-quarter GDP plunged by worst-ever 32.9% amid virus-induced shutdown

PUBLISHED THU, JUL 30 20208:31 AM EDTUPDATED 13 MIN AGOJeff Cox@JEFF.COX.7528@JEFFCOXCNBCCOMKEY POINTS

  • The U.S. economy suffered its worst period ever in the second quarter, with GDP falling 32.9%.
  • Economists surveyed by Dow Jones were looking for a decline of 34.7%.

WATCH NOWVIDEO03:49US Q2 GDP shrunk by a record 32.9%, vs 34.7% expected

The U.S. economy saw the biggest plunge in activity it has ever known in the second quarter, though it wasn’t quite as bad as feared.

Gross domestic product from April to June plunged 32.9% on an annualized basis, according to the Commerce Department’s first reading on the data released Thursday. Economists surveyed by Dow Jones had been looking for a drop of 34.7%.

Still, it was the worst drop ever, with the closest previously coming in mid-1921. 

The report “just highlights how deep and dark the hole is that the economy cratered into in Q2,” said Mark Zandi, chief economist at Moody’s Analytics. “It’s a very deep and dark hole and we’re coming out of it, but it’ going to take a long time to get out.”

Sharp contractions in personal consumption, exports, inventories, investment and spending by state and local governments all converged to bring down GDP, which is the combined tally of all goods and services produced during the period.

Personal consumption, which historically has accounted for about two-thirds of all activity in the U.S., subtracted 25% from the Q2 total, with services accounting for nearly all that drop. 

Spending slid in health care and goods such as cl

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