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US economy shrinks at the fastest rate for a decade as shock new figures revealed

The US has seen a massive drop in economic activity amid the coronavirus pandemic leading to nationwide stay-at-home orders and business closures.

Contractions in the first quarter sank at an annual rate of 4.8 percent.

It is the first contraction for the US economy since 2014, ending a continuous run of expansion.

Policymakers at America’s central bank said on Wednesday said the pandemic “is causing tremendous human and economic hardship across the United States and around the world.”

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The decline was the most since an 8.4 percent decline in the fourth quarter of 2008.

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THE UNITED STATES economy has seen it’s most severe contraction in the first quarter in the year. (Image: PA)

The US has attempted to protect the economy by introducing nearly $ 3 trillion in stimulus packages and spending.

The Federal Reserve has also lowered interest rates to near zero in as bid to revitalised the struggling economy.

On Wednesday, Federal Reserve Chair Jerome Powell said the bank would maintain those levels until it was “confident that the economy has weathered recent events and is on track”.

He warned however that the ongoing crisis would “weigh heavily” on the economy.

Mr Powell said at a virtual press conference: “Will there be a need to do more? I would say the answer to that will be a yes.”

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Contractions in the first quarter sank at an annual rate of 4.8 percent. (Image: PA)

Other factors in the unprecedented downturn is the unemployment rates skyrocketing as the pandemic rages on.

Since mid-March, more than 26 million people in the US have filed for unemployment, and the US has seen historic declines in business activity and consumer confidence.

Forecasters expect growth to contract 30 percent or more in the three months to June.

Mark Zandi, chief economist at Moody’s Analytics, expressed his concerns for the economy.

Mr Zandi said: “This is off the rails, unprecedented.

“The economy has just been flattened.”

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The White House’s predicted COVID-19 death toll (Image: Express)

Before the coronavirus devastated the global economy, the US economy was expected to grow about 2 percent this year.

But by mid April, more than 95 percent of the country was was in some form of lockdown.

Although some states have started to remove the orders, they remain in place in many others, including major economic engines such as New York and California.

Georgia has began lifting their lockdown earlier, which could see its daily coronavirus death toll double by August according to a new model shared by the Centers for Disease Control and Prevention.

Since mid-March, more than 26 million people in the US have filed for unemployment, and the US has seen historic declines in business activity and consumer confidence. (Image: PA)

US President Donald Trump has been pushing for the lockdown to begin easing to get the economy back on track. (Image: PA)

US President Donald Trump has been pushing for the lockdown to begin easing to get the economy back on track.

At a White House daily press briefing on Tuesday, he said: “Now our country’s opening up again and I think it’s going to be very, very successful.

“I think the fourth quarter will be great.

“And I think next year is going to be a tremendous year for this country.

“I think what happens is (the virus is) going to go away.

“This is going to go.

“And whether it comes back in a modified form in the fall, we’ll be able to handle it. “

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