Record contraction for US economy: minus 32.9 percent in second quarter | NOW

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The US economy shrank by 32.9 percent in the second quarter from a year earlier, according to figures from the United States Department of Commerce on Thursday. The minus of 32.9 percent is the largest contraction since 1945, when the ministry began to keep figures. The US has been hit hard by the corona crisis, the country has the largest number of infections and deceased corona patients in the world.

The record contraction follows a contraction of 5 percent in the first quarter compared to a year earlier. Compared to the first quarter, the US economy has shrunk by 9.5 percent.

Still, the economic contraction was smaller than analysts expected. They assumed a minus of 34.1 percent. The main cause is the sharp drop in consumer spending. They spent 34.6 percent less than in the second quarter of 2019. Consumer spending has traditionally accounted for two-thirds of US economic activity.

The contraction follows months in which the US economy was mostly closed, to combat the spread of the coronavirus. With many shops and restaurants closing, a record number of Americans were fired. More Americans were unemployed than during the crisis of the 1930s.

Meanwhile, the economy of the US, like that of many other countries, is slowly starting up again. Despite the slight recovery, the number of claims for unemployment benefits rose to 1.43 million last week. It was the second week in a row that the number of applications grew. In the previous period there had been a decline for four months.

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