The U.S. economy shrank at an alarming annual rate of 31.7% during the April-June quarter as it struggled under the weight of the viral pandemic, the government estimated Thursday. It was the sharpest quarterly drop on record.
The Commerce Department downgraded its earlier estimate of the U.S. gross domestic product last quarter, finding that the devastation was slightly less than the 32.9% annualized contraction it had estimated at the end of July.
The previous worst quarterly drop since record-keeping began in 1947 was a 10% annualized loss in 1958.
Last quarter, businesses shuttered and millions of workers lost jobs as the world's largest economy went into lockdown mode in what succeeded only fitfully in limiting the spread of reported viral infections.
A bounce-back in hiring as many businesses reopened suggested that the economy began to recover in June with third-quarter growth estimated to be around 20% annualized.
But economists say a full recovery remains far off given that the virus has yet to be contained and the government’s financial support has faded.
Unemployment is still high at 10.2%, and roughly 1 million people are applying for jobless aid each week even as the amount of aid they receive has shrunk. Consumer confidence has tumbled. Though the stock market and home sales are surging, the broader economy shows signs of stalling, and millions face potential evictions from their homes.