Coronavirus impact / biggest slowdown in US economy in a decade, GDP decreased by 4.8% in first quarter

·      The Bureau of Economic Analysis of the Ministry of Commerce said - there is a danger of a bigger fall in the second quarter

·       President Donald Trump predicts economy to pick up from third quarter

The US economy recorded the biggest slack in a decade due to coronavirus. According to the latest advance estimate of the government released on Wednesday, US GDP declined by 4.8 percent in the first quarter of this year. The Bureau of Economic Analysis (BEA) of the US Ministry of Commerce said that attempts to stop the spread of coronaviruses are also a major cause of economic slowdown. The BEA said this was the biggest decline in the past decade. There is a risk of further decline in the second quarter (April-June).




According to White, US GDP may fall 15-20 percent in April-June quarter

In the fourth quarter of 2019 (October – December), the US real GDP was recorded at 2.1 percent. Late last week, White House senior economic adviser Kevin Hassett said GDP could decline by 15–20 percent in the second quarter. President Donald Trump said on Monday that the US economy will start picking up from the third quarter of this year, but from the fourth quarter the economy will see a big boom.




Consumer spending, non-residential fixed investment, exports and private inventory investment declined

BEA stated that the real GDP in the first quarter declined because of consumer spending, non-residential fixed investment, exports and private inventory investment. However, residential fixed investment and government spending increased during this period. Imports declined. New motor vehicles contributed the most to the decline in the durable goods sector. The non-durables sector saw a boom in the food and other non-durables sectors (especially prescription drugs), but the textile and footwear sector declined during this period.