The US economy shrank at a 5.0% rate in the first quarter with a much worse decline expected in the current three-month economic period, which will show what happened when the pandemic began to spread across the country, Martin Crutsinger reported for the Associated Press (AP) late on June 25, 2020.

The Commerce Department reported Thursday that the decline in the gross domestic product, the total output of goods and services, in the January-March quarter was unchanged from the estimate made a month ago.

The 5% drop was the sharpest quarterly decline since an 8.4% fall in the fourth quarter of 2008 during the depths of the worst financial crisis since the Great Depression. The first quarter period captured just two weeks of the shutdowns that began in many parts of the country in mid-March.

Economists believe that GDP plunged around 30% from April through the end of this month. That would be the biggest quarterly decline on record, three times bigger than the current record-holder, a 10% drop in the first quarter of 1958. Forecasters believe the economy will rebound in the second half of the year. The Congressional Budget Office is predicting a 21.5% growth rate in the upcoming July-September quarter followed by a 10.4% gain in the fourth quarter.

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