WASHINGTON: The US economy likely contracted at its steepest pace since the Great Depression in the second quarter as the COVID-19 pandemic destroyed consumer and business spending, potentially wiping out more than five years of growth.
The drop in GDP would be more than triple the previous all-time decline of 10 per cent in the second quarter of 1958. On a non-annualized basis, GDP likely tumbled 10.6 per cent. The economy contracted 5 per cent in the first quarter. The plunge in GDP and faltering recovery could put pressure on the White House and Congress to agree on a second stimulus package. President Donald Trump, whose opinion poll numbers have tanked as he struggles to manage the pandemic, economic crisis and protests over racial injustice three months before the Nov 3 election, said on Wednesday he was in no hurry.Economists say without the historic fiscal package of nearly US$3 trillion, the economic contraction would have been deeper.
Consumer spending, which accounts for more than two-third of the US economy, is expected to have contracted at the same margin as GDP in the second quarter. Major retailers, including JC Penney and Neiman Marcus, have filed for bankruptcy.
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