U.S. Economy Contracts at Record Rate in 2nd Quarter
The U.S. economy contracted at a record rate in the second quarter, and setbacks this past month in the jobs market only exacerbated a slowing recovery as the nation faces a summer surge in COVID-19 infections, reports the Wall Street Journal. The U.S. Commerce Department said gross domestic product fell at a seasonally and inflation adjusted 32.9% annual rate from April through June. The figures were the steepest declines in more than 70 years of record-keeping.
Meanwhile, the U.S. Labor Department's latest figures on unemployment benefits suggested the jobs market was faltering. The number of American workers applying for initial unemployment benefits increased for the second consecutive week after almost four months of decreases following a late-March peak.
The second-quarter economic contraction came as states imposed lockdowns in March and April to contain the coronavirus pandemic — triggering a steep drop in output — and then lifted restrictions in May and June — allowing growth to resume. Economists expect the third quarter, which began on July 1, to show growth, though the summer rise in infections is likely to temper gains.