US Economy Shrank at 4.8% Rate Last Quarter as Virus Struck
WASHINGTON (AP) — The U.S. economy shrank at a 4.8% annual rate last quarter as the coronavirus pandemic shut down much of the country and began triggering a recession that will end the longest expansion on record.
The Commerce Department estimated Wednesday that the gross domestic product, the total output of goods and services, posted a quarterly drop for the first time in six years.
And it was the sharpest fall since the economy shrank at an 8.4% annual rate in the fourth quarter of 2008 in the depths of the Great Recession.
The drop in the January-March quarter will be only a precursor of a far grimmer GDP report to come on the current April-June period, with business shutdowns and layoffs striking with devastating force.
With much of the economy paralyzed, the Congressional Budget Office has estimated that GDP will plunge this quarter at a 40% annual rate.