GDP Drops 9.5 Percent in Q2

By Staff Writer July 30, 2020

Real gross domestic product (GDP) decreased 9.5 percent in the second quarter, a historic annual rate of 32.9 percent, according to the “advance” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 5.0 percent.

According to the BEA, the GDP estimate released July 30 is based on source data that are incomplete or subject to further revision by the source agency. The “second” estimate for the second quarter, based on more complete data, will be released on Aug. 27.

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. This led to rapid shifts in activity, as businesses and schools continued remote work and consumers and businesses canceled, restricted, or redirected their spending. The full economic effects of the COVID-19 pandemic cannot be quantified in the GDP estimate for the second quarter of 2020 because the impacts are generally embedded in source data and cannot be separately identified.

The decrease in private inventory investment primarily reflected a decrease in retail, led by motor vehicle dealers.

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Last modified on Friday, 31 July 2020 14:37

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