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US GDP slumped 4.8% in the first quarter

  • Leader
    Oct 18
    US gross domestic product fell at a 4.8% annualized rate in the first
    quarter, according to Commerce Department figures released Wednesday.
    The report showed that the longest-ever economic expansion that started
    following the Great Recession has officially ended. Now, economists are
    watching to see how bad second quarter GDP may slump as the coronavirus
    pandemic continues in the US.Visit Business Insider's homepage for more
    stories.To get more news about WikiFX, you can visit wikifx official website.



      The longest-ever US economic expansion is officially over. US gross
    domestic product fell at a 4.8% annualized rate in the first quarter,
    according to Commerce Department figures released Wednesday. Economists
    expected that GDP would shrink by a 3.8% annualized rate in the first
    quarter, according to Bloomberg data. The slump from January through
    March reflects the sharp economic impact of country-wide shutdowns to
    curb the spread of Covid-19. In March, most of the US went into lockdown
    mode — states banned non-essential business, sent workers home, and
    told residents to practice social-distancing.“Today's first quarter
    numbers are just the deeply unappetizing appetizer,” wrote Ian
    Shepherdson, chief economist of Pantheon Macroeconomics, in a Wednesday
    note.



      The GDP contraction has ended the longest-ever economic expansion
    that took place in the US after the Great Recession of 2007-2009. During
    the record expansion, the unemployment rate fell to a 50-year low of
    3.5%, and the US economy added jobs for 113 months in a row.

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    he's betting big on a consumer recovery — and shares his top 4 stock
    picks in the struggling sectorNow, it's likely that a
    coronavirus-induced recession started in the first quarter. A slew of
    economic indicators point to extreme fallout in the US economy.In just
    five weeks, 26 million Americans have filed for unemployment claims,
    effectively erasing more than a decade of job creation in just over a
    month. In addition, industrial production has fallen, retail sales have
    declined at a record pace, and housing sales have slumped.



      While some economists mark the beginning of a recession as two
    consecutive quarters of GDP contraction, official arbiters have a more
    comprehensive approach. The National Bureau of Economic Research says a
    recession is “a significant decline in economic activity spread across
    the economy, lasting more than a few months, normally visible in real
    GDP, real income, employment, industrial production, and
    wholesale-retail sales.” Any official call will take some time, as the
    bureau's Business Cycle Dating Committee weighs whether a recession
    began in March, when much of the US was shut down amid the coronavirus
    pandemic, or if the economy started trailing off at the end of February.
    Going forward, economists will be watching to see how bad the situation
    becomes and weigh what shape a recovery might take. The worst may be
    yet to come — first quarter GDP could be revised even lower as more data
    is collected.In addition, second quarter GDP is expected to fall at an
    even sharper annualized rate. Economists expect major slumps, ranging
    from Bank of America's -30% estimate to JPMorgan's -40% forecast.