The US economy is feeling the consequences of the corona pandemic very clearly: In the second quarter, gross domestic product (GDP) fell 32.9 percent over the year. Compared to the previous quarter, this corresponds to a minus of almost ten percent. This means that the American economy is in a downward trend for the second quarter in a row. From January to March, GDP had already dropped by 4.8 percent. The current slump is considered the strongest since statistics began 73 years ago.
Much of the economic development can be attributed to the reluctant shopping behavior of the American population. Compared to the first quarter, consumption dropped by more than a third – around 34.6 percent. Investments and exports also declined from April to June due to the pandemic.
New infections could exacerbate the economic situation
Unemployment is also increasing and increasing pressure on the US economy. According to the U.S. Department of Labor, more than 1.4 million U.S. citizens filed an initial jobless claim last week. Around 17 million people are already receiving financial support. The development on the labor market is particularly explosive in view of the expiring Corona aid. In March, Congress increased aid to the unemployed to $ 600 a week. An extension of the measure has not yet been decided, the removal affects millions of Americans.
The contraction in the US economy is at a similar level to that in Germany. From April to June, GDP fell by around 10.1 percent compared to the first quarter. After the economic low during the lockdown in April, however, a recovery is gradually beginning in the Federal Republic. In the USA, however, the upswing is uncertain given the high number of new infections.
Federal Reserve chief Jerome Powell warned on Wednesday of a historic decline in economic performance in the second quarter. He also linked the further recovery of the economy to the success of the fight against pandemics. The economic outlook is therefore uncertain. His opinion agrees with that of American economists. Although they expect a strong plus for the third quarter, the development of the pandemic could exacerbate the economic situation.