US GDP fell 4.8% in the first quarter of 2020 amid COVID-19 pandemic

The United States Gross Domestic Product (GDP) shrank by 4.8% in the first quarter as per the latest numbers released by the government's Bureau of Economic Analysis. According to reports, the fall in GDP is caused by the shutdown that has been imposed in the United States and many parts of the world in order to prevent the spread of the coronavirus. Dow Jones had estimated that the US GDP will drop by 3.5% due to the COVID-19 lockdown. 

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According to reports, this is the first time the United States recorded a negative GDP reading since 2014 when the contraction 1.1% in the first quarter. And the recent numbers are the lowest since the housing market collapse in 2018 when the GDP fell by 8.2%. As per reports, the United States is currently suffering from an economic strain and most economists see the country in recession already after more than 26 million people filed for initial unemployment claims in the past five weeks, which is about 10 million more than the 2008 financial crisis. 

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According to reports, consumer expenditure fell by 7.6% in the first quarter of 2020 after all non-essential stores were asked to shut down amid the lockdown. The consumer expenditure accounts for 67% of the US GDP. Exports dropped 8.7% while imports plunged 15.3%, including a 30% drop in services. As per reports, expenditure on services recorded a drop by 10.2% while durable goods spending fell by 16.1%. 

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Coronavirus in the US

According to data by worldometer, the United States has recorded over a million cases and 59,284 deaths as of April 29. New York City is the hotspot in America where alone over 23,000 people have lost their lives in the last three months. New York has more casualties than all the other majorly affected countries except for Italy, Spain, and France. The United States has successfully treated 1,43,098 patients so far. 

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(Image Credit: AP)