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The Commerce Department's report said the biggest monthly decline recorded came as “consumers canceled, restricted or redirected their spending.”
Consumer spending accounts for nearly two-thirds of U.S. GDP and has been a key driver of the economy in recent years. A steep decline in spending dragged down gross domestic product, the broadest measure of goods and services produced across the economy, at a seasonally adjusted annual rate of 4.8% in the first quarter of the year, the department said Wednesday.
The severity of the coronavirus-induced downturn will be reflected more accurately in the second quarter, when the nation’s economy came to a near standstill to mitigate the spread of the virus. Estimates vary widely — Goldman Sachs forecast a decline of 34 percent — but economists agree it’ll be bleak.
In the past six weeks, more than 30 million Americans have lost their jobs, curtailing their willingness to spend money.
Even when the economy reopens, Federal Reserve Chairman Jerome Powell said Americans may still be hesitant.
"You would think behavior will change as people gain confidence, so the sooner we get the virus under control, the sooner people can regain that confidence and regain our economic activity,” he said.