Economy & Business

GDP Falls by 9.5 Percent in Second Quarter in Largest Contraction on Record

Temporary closed signage at a store in New York following the outbreak of coronavirus disease in New York, N.Y., March 15, 2020. (Jeenah Moon/Reuters)

The U.S. economy suffered its largest contraction on record in the second quarter as the country suffered in the throes of the coronavirus pandemic and states issued lockdown orders, ordering Americans to stay home and businesses to close.

Gross domestic product fell 9.5 percent from April through June, the Commerce Department said Thursday, the largest quarterly drop in recorded history. The economy contracted by an annual rate of 32.9 percent, slightly less than economists had predicted. The second largest drop in GDP was in 1921.

Meanwhile, another 1.43 million Americans filed initial unemployment claims last week, the nineteenth week the total has surpassed one million new claims.

The staggering numbers come as cases of the coronavirus increase in some southern and western states that reopened their economies several weeks ago, causing governors in Texas, Florida, and California to implement some social distancing restrictions once again.

Congress faces increasing pressure to approve another coronavirus relief package as out of work Americans face the expiration this month of the extra $600 a week in unemployment benefits lawmakers approved in March as the pandemic began spreading rapidly across the country.

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