U.S. Economy Posts Record Decline During Lockdowns

by Robert Hughes
The American Institute for Economic Research

Real gross domestic product plunged at a historic 32.9 percent annualized rate in the second quarter, down sharply from a severe -5.0 percent pace of decline in the first quarter. Over the past four quarters, real gross domestic product is down 9.5 percent, the worst year-over-year on record (see first chart). On a nominal basis, gross domestic product tumbled 34.3 percent in the second quarter, putting the change from a year ago at -9.0 percent.

The historic plunge in the second quarter was expected as the outbreak of COVID-19 and government responses including shelter-in-place orders for individuals and the shutdown of nonessential businesses crushed the labor market and most economic activity.

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