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COVID-19 sends GDP plummeting

by Kyle Ziemnick
Posted 7/30/20, 12:01 pm

WASHINGTON—The U.S. Commerce Department on Thursday reported a 33 percent annualized drop in the gross domestic product in the second quarter of 2020. That’s triple any other quarterly economic loss since the department first released estimates in 1947. Last quarter became the second in a row with a GDP decrease after years of sustained growth.

How is the GDP calculated? The measurement of the total output of goods and services for each quarter relies heavily on consumer spending, which makes up 70 percent of economic activity in the United States. Coronavirus-related travel restrictions and business closures over the past few months decimated such spending. Many experts predict a bounce back during the third quarter, but that depends on the progress of reopening economies in states across the country.

Dig deeper: Read Charissa Koh’s report in Compassion on renters who face eviction during the pandemic.

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Kyle Ziemnick

Kyle is a WORLD Digital news reporter. He is a World Journalism Institute and Patrick Henry College graduate. Kyle resides in Purcellville, Va. Follow him on Twitter @kylezim25.

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  •  Ernest C Beisner's picture
    Ernest C Beisner
    Posted: Fri, 07/31/2020 06:59 pm

    It wasn't COVID-19 that caused the GDP drop. The disease--awful as it is--kills very few people under retirement age and thus needn't have hit GDP hard at all. (And, no, that's not a reason to undervalue the lives of those it does kill, regardless of age.) It was the forced closure of so many businesses that kneecapped GDP. And it will continue to do so as long as it continues. And the loss of GDP will have its own knock-on effect in terms of deaths, as I argued early on in "How Many Uninfected People with the 'War on the Coronavirus' Kill?" And the effect is not just in the US but worldwide, as Indian scientist Vijay Jayaraj argues in "COVID-19 Restrictions Send Billions Back Into Poverty, Reversing Decades of Progress."