The U.S. economy shrank 1.2% in the first quarter, which would be an annual decline of 4.8%. That’s a horrible number, but Vox writes, it’s probably worse.
“Indeed, because quarterly GDP statistics are calculated as changes in the average level of GDP across the three-month period, rapid changes at the end of the quarter in effect receive less weight than they would have had they happened at the beginning of the period. Consequently, the actual rate of economic decline once the decline set in was almost certainly much more rapid than the 4.8 percent number would suggest.“
Economists are in agreement that the second quarter results will see a much steeper decline in GDP.
It was the biggest slide since 2008’s Great Recession and the effect of the virus have brought the longest economic expansion to an abrupt halt. NBC News writes:
“You’re looking at something like minus 20 percent to minus 30 percent in the second quarter,” White House economic adviser Kevin Hassett told CNBC on Monday, noting that the coronavirus is “the biggest shock since the Great Depression. It’s a very grave shock and it’s something we need to take seriously.”
The Congressional Budget Office estimated second-quarter GDP would be down by as much as 40 percent, for the worst quarter since 1947.