US gross domestic product (GDP) fell 4.8 percent in the first quarter of 2020 amid the coronavirus pandemic lockdown, according to data released by the Department of Commerce on Wednesday.
The decline is worse than expected by economists. It is the first negative GDP reading since the 1.1 percent decline in the first quarter of 2014, and the lowest level since the 8.4 percent plunge in Q4 of 2008 during the global financial crisis.
Consumer spending, nonresidential fixed investment, exports and inventories were the biggest drags on the economy. Consumer expenditures, which comprise 67 percent of total GDP, plummeted 7.6 percent in the quarter as all nonessential stores were closed.
Data showed that exports fell 8.7 percent while imports sank 15.3 percent, including a 30 percent crash in services. Goods consumption dropped 1.3 percent, while services slid over 10 percent.
Economists say the count of all goods and services produced in the country shows that even though the first quarter saw only two weeks of shutdown, the impact was pronounced and set the stage for a second-quarter picture which will be the worst in the post-World War II era.
“The upshot is this was already an economic catastrophe within two weeks of the lockdowns going into effect,” Paul Ashworth, chief US economist at Capital Economics, told CNBC. He added: “The second quarter will be far worse.”
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