It was a COVID-induced decline for the stateside economy.
Figures released Thursday by the U.S. Commerce Department showed the economy saw the biggest plunge in activity it has ever known in the second quarter, though it wasn’t quite as bad as feared.
Gross domestic product from April to June plunged 32.9%, according to the Department’s first reading on the data. Economists had forecast for a drop of 34.7%.
Still, it was the worst drop ever, with the closest previously coming in mid-1921.
Sharp contractions in personal consumption, exports, inventories, investment and spending by state and local governments all converged to bring down GDP, which is the combined tally of all goods and services produced during the period.
Spending slid in health care and goods such as clothing and footwear. Inventory investment drops were led by motor vehicle dealers, while equipment spending and new family housing took hits when it came to investment.
Prices for domestic purchases, a key inflation indicator, fell 1.5% for the period, compared to a 1.4% increase in the first quarter when GDP fell 5%, The personal consumption expenditures price index dropped 1.9% after rising a tepid 1.3% in Q1. Excluding food and energy, the "core" PCE prices were off 1.1%.
However, personal income soared, thanks in large part to government transfer payments associated with the coronavorus pandemic. Current-dollar personal income rose more than six-fold to $1.39 trillion, while disposable personal income shot up 42.1% to $1.53 trillion.
