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Final GDP Number Is One for the Record Books: 31.4%

That's the Q2 contraction
By Newser Editors and Wire Services
Posted Sep 30, 2020 8:11 AM CDT

(Newser) – The US economy plunged at a record rate in the spring but is poised to swing to a record increase in the quarter that just ended. The Commerce Department reported Wednesday in its final estimate for the April-June quarter that the gross domestic product, the economy’s total output of goods and services, fell at a rate of 31.4%. (This estimate, the third, is down from the initial estimates of 33% and 31.7%.) The report shows a decline that is almost four times larger than the previous record-holder, a fall of 10% in the first quarter of 1958 when Dwight Eisenhower was president. The Washington Examiner reports the biggest GDP drop during the Great Recession was 8.4%. The Q1 decline was 5%.

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The AP reports economists believe the economy will expand at an annual rate of 30% in the current quarter as businesses have re-opened and millions of people have gone back to work. That would shatter the old record for a quarterly GDP increase, a 16.7% surge in the first quarter of 1950 when Harry Truman was president. The government will not release its just-ended July-September GDP report until Oct. 29, just five days before the presidential election. Many are forecasting that growth will slow significantly in the final three months of this year to a rate of around 4% and could actually topple back into a recession if Congress fails to pass another stimulus measure or if a rising number of coronavirus cases sharply curtails economic activity.

(Read more economy stories.)

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