Washington, Aug 27 (efe-epa).- The United States’ gross domestic product plummeted at an annual rate of 31.7 percent in the second quarter, the Bureau of Economic Analysis said in a revised estimate released Thursday.
That figure was a slight improvement over the preliminary estimate issued last month by the BEA, which said then that GDP had plunged by an annual rate of 32.9 percent in the second quarter due to the coronavirus-triggered stay-at-home orders issued by the vast majority of states.
Even so, the revised, or “second,” estimate still constitutes the largest economic contraction ever registered in the world’s largest economy. A third and final estimate of second-quarter US GDP will be released on Sept. 30
The decrease in real GDP between April and June reflected decreases in personal consumption expenditures, exports, non-residential fixed investment, private inventory investment, residential fixed investment and state and local government spending, the BEA said.
That agency of the US Commerce Department said those declines were partly offset by an increase in federal government spending.
“The decline in second quarter GDP reflected the response to Covid-19, as ‘stay-at-home’ orders issued in March and April were partially lifted in some areas of the country in May and June, and government pandemic assistance payments were distributed to households and businesses,” the BEA said.
“This led to rapid shifts in activity, as businesses and schools continued remote work and consumers and businesses canceled, restricted, or redirected their spending.”
But the annual rate (the rate of growth or contraction over a year if gross domestic product were to keep growing or contracting at the same quarterly rate for three more quarters) is only one way of measuring changes in GDP.
When comparing US GDP in the second quarter of 2020 with the output of goods and services in the same quarter of 2019, the decline was 9.1 percent, according to the BEA data released Thursday.
In March, President Donald Trump signed into law the $2.2 trillion CARES Act – a coronavirus relief bill that was the single largest stimulus package in US history – to counteract the effect of the lockdowns. That bill included roughly $300 billion in one-time cash payments to individual Americans.
The Democrat-led House of Representatives later passed a new $3.5 trillion stimulus package in May that, among other things, would reinstate $600 in weekly federal unemployment benefits that have now lapsed and provide $875 billion in additional funding for state and local governments, nearly six times as much as was approved in the CARES Act.
The Republican-controlled Senate, however, has rejected that bill and countered with a proposal for roughly $1 trillion in additional aid.
The two sides remain far apart in their negotiations. EFE-EPA