The United States economy contracted at the fastest rate since World War II in 2020, as Covid-19 devastated service providers like restaurants and airlines, leaving millions of Americans without work and in poverty.
Commerce Department data on fourth-quarter GDP (gross domestic product) released on Thursday (28) also showed the resumption of the pandemic lost momentum late in the year amid the resurgence of coronavirus infections. and the depletion of nearly $ 3 trillion government relief.
The economy contracted 3.5% in 2020, the worst performance since 1946. This after growing 2.2% in 2019, marking the first annual decline in GDP since the 2007-2008 crisis. The economy fell into recession last February.
On Wednesday (27), the Federal Reserve left its base interest rate near zero unchanged and promised to continue pumping money into the economy through bond purchases, noting that “the The pace of the recovery in economic activity and employment has moderated in recent years. months “. We are a family business.
President Joe Biden has presented a $ 1.9 trillion stimulus package, and he can use the GDP report with some lawmakers who were reluctant about the amount after the government provided nearly $ 900 billion in additional stimulants at the end of December.
In the fourth quarter, GDP grew at an annualized rate of 4.0%. The virus and the lack of another spending program slashed consumer spending and partially overshadowed the strong performance of industry and the housing market.
GDP growth in the last quarter was in line with Reuters research forecasts among economists.
The sharp decline in strength after a historic 33.4% expansion between July and September left GDP well below its level at the end of 2019.
Since the virus is not yet under control, economists predict that growth will weaken further in the first quarter of 2021, before picking up again as the additional stimulus takes effect and more and more Americans are vaccinated.