The US economy contracted by 32.9% between April and June, its worst drop on record, the Bureau of Economic Analysis said Thursday.
Business ground to a halt during the pandemic lockdown in the spring of this year, and America plunged into its first recession in 11 years, putting an end to the longest economic expansion in US history.
A recession is commonly defined as two consecutive quarters of declining gross domestic product — the broadest measure of the economy. Between January and March, GDP declined by 5%.
But this is no ordinary recession. The combination of public health and economic crises is unprecedented, and numbers cannot fully convey the hardships millions of Americans are facing.
The pandemic pushed the economy fell off a cliff. The GDP drop was nearly four times worse than during the peak of the financial crisis, when GDP fell 8.4% in the fourth quarter of 2008.
Quarterly GDP numbers are expressed as an annualized rate. This means that the economy didn't actually contract by a third from the first quarter to the second. The annualized rate measures how much the economy would grow or shrink if conditions were to persist for 12 months. But by either measure, the second quarter is still the worst on record.
The US only began keeping quarterly GDP records in 1947, so it's difficult to compare the current downturn to the Great Depression. That said, in 1932 the US economy contracted 12.9%.
This is a developing story. It will be updated