Washington | The GDP of the United States has experienced a historical decline of 32.9% in the second quarter, in annualized terms, under the effect of the pandemic COVID-19, according to a preliminary estimate from the Commerce department released on Thursday.
This fall, significantly less than the 35% expected by analysts, marking the official entry into recession, the first economy in the world after a first quarter in decline.
Compared to the second quarter of 2019, the reduction is 9.5%.
The measure used in the United States for estimating the growth is the change in (annualized), which compares the GDP for the previous quarter, and projects the evolution over the entire year at this rate. It differs from the year-on-year, which compares GDP to the same quarter of the previous year.
The fall of the GDP “reflects the answer given to the COVID-19, with the containment measures imposed in march and April, partially offset by the reopening of a part of the activity in certain regions of the country in may and June,” details the department of Commerce in its press release.
The contraction of the GDP, lower to the fall of 37% estimated by the international monetary Fund, is largely due to the decline in consumer spending – a major component of the gross domestic Product -which declined from 34.6% in the second quarter, in annualized terms also.
The expenditure in the services, one of the sectors most affected by the crisis, have fallen by 43.5%.
Private investment has fallen to 49%.
Not surprisingly, federal government spending surged 17.4%, due to the financial assistance provided to households and businesses.
Consumer prices have also fallen by 1.9% over the quarter, when they were up 1.3% in the first quarter, according to the index, PCE is also released on Thursday.
In the first quarter, the GDP of the largest economy of the world declined by 5% under the effect of the containment measures imposed in mid-march.
The United States has experienced a growth of 2.3% in 2019, and president Donald Trump, who had made the good health of its economy as an argument in his race for re-election, was 3% per year.