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COVID-19

U.S. economy shrank at record-breaking 33% rate last quarter

Associated Press Jul 30, 2020
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The Commerce Department’s estimate of the second-quarter decline in GDP marked the sharpest such drop on records dating to 1947. Valerie Macon/AFP via Getty Images
COVID-19

U.S. economy shrank at record-breaking 33% rate last quarter

Associated Press Jul 30, 2020
The Commerce Department’s estimate of the second-quarter decline in GDP marked the sharpest such drop on records dating to 1947. Valerie Macon/AFP via Getty Images
HTML EMBED:
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The audio attached to this post features an interview from the “Marketplace Morning Report” with Diane Swonk, chief economist at the tax and advisory firm at Grant Thornton.

What’s important is the losses were so broad-based,” she told host David Brancaccio. “We saw them in every single category, even in government spending where increases at the federal level offset declines at the state and local levels, which were quite steep.”

Click the audio player above to listen.


The U.S. economy shrank at a dizzying 32.9% annual rate in the April-June quarter — by far the worst quarterly plunge ever — when the viral outbreak shut down businesses, throwing tens of millions out of work and sending unemployment surging to 14.7%, the government said Thursday.

The Commerce Department’s estimate of the second-quarter decline in the gross domestic product, the total output of goods and services, marked the sharpest such drop on records dating to 1947. The previous worst quarterly contraction, a 10% drop, occurred in 1958 during the Eisenhower administration

COVID-19 Economy FAQs

What’s the outlook for vaccine supply?

Chief executives of America’s COVID-19 vaccine makers promised in congressional testimony to deliver the doses promised to the U.S. government by summer. The projections of confidence come after months of supply chain challenges and companies falling short of year-end projections for 2020. What changed? In part, drugmakers that normally compete are now actually helping one another. This has helped solve several supply chain issues, but not all of them.

How has the pandemic changed scientific research?

Over the past year, while some scientists turned their attention to COVID-19 and creating vaccines to fight it, most others had to pause their research — and re-imagine how to do it. Social distancing, limited lab capacity — “It’s less fun, I have to say. Like, for me the big part of the science is discussing the science with other people, getting excited about projects,” said Isabella Rauch, an immunologist at Oregon Health & Science University in Portland. Funding is also a big question for many.

What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?

Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”

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