European economy suffers biggest hit on record amid pandemic

It was the biggest drop since statistics began in 1995

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The European economy shrank by 3.8 percent in the first quarter as business activity was frozen by shutdowns aimed at preventing the spread of the coronavirus.

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It was the biggest drop since statistics began in 1995 and bigger than the plunge in the midst of the global financial crisis in the first quarter of 2009 after the bankruptcy of US investment bank Lehman Brothers.

US ECONOMY SHRANK BY 4.8 PERCENT IN FIRST QUARTER, AS CORONAVIRUS ENDS RECORD-LONG EXPANSION

Unemployment rose only slightly even amid the massive shutdowns that idled everything from florists to restaurants to factories. The February jobless figure from European Union statistics agency Eurostat rose to 7.4 percent in March from 7.3 percent in February. Millions of workers are being supported by temporary short-hours programs under which governments pay most of their salaries in return for companies agreeing not to lay people off.

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The figures come ahead of a meeting of the European Central Bank, which analysts think may expand its bond purchase program that supports governments and borrowing markets. That decision may not come Thursday but markets are awaiting an assessment from bank head Christine Lagarde.