Badly battered by the coronavirus pandemic, the U.S. economy contracted at a record 32.9% annual rate in the second quarter of this year, The Wall Street Journal reported.
The latest economic contraction is the steepest since the Great Depression. Previously US GDP had never contracted by more than 10% on an annualized basis in any quarter since the government began maintaining quarterly growth data from 1947. The decline this quarter that is more than three times greater than in the first quarter of 1958, when GDP plunged by 10% annual rate.
Consumer spending contracted by a whopping 34.6% annualized while spending on services sector including travel, tourism, medical care plunged at a 43.5% annual pace. Households expenses dropped by 11.3%, Business investments also dropped dramatically as firms held back on spending.
Even as the US economy showed some signs of recovery in May, the recent surge in coronavirus cases in the economic powerhouse state like Texas, Florida and California, has also dealt a huge blow to the nascent economic recovery.
Millions of Americans are still out of work, thousands of businesses have shut and many of those that remain open have scaled down operations because of weak demand or ongoing lockdown. According to Labor Department release on Thursday, applications for unemployment benefits increased by a seasonally adjusted 12,000 to 1.43 million for the week ended July 25.
The collapse in economic growth and tepid recovery potential is sure to put pressure on the White House and Congress to deliver another stimulus package.
As you are no doubt aware, Swarajya is a media product that is directly dependent on support from its readers in the form of subscriptions. We do not have the muscle and backing of a large media conglomerate nor are we playing for the large advertisement sweep-stake.
Our business model is you and your subscription. And in challenging times like these, we need your support now more than ever.
We deliver over 10 - 15 high quality articles with expert insights and views. From 7AM in the morning to 10PM late night we operate to ensure you, the reader, get to see what is just right.
Becoming a Patron or a subscriber for as little as Rs 1200/year is the best way you can support our efforts.