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US economy contracts in 1Q2020, initial data shows

The Edge Singapore Published on Wed, Apr 29, 2020 / 9:04 PM GMT+8

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SINGAPORE (April 29): US GDP contracted by 4.8% y-o-y in 1Q2020 according to the "advance" estimate released by the Bureau of Economic Analysis (BEA), and below economists’ expectations of a 4% contraction in the US economy. In the fourth quarter of 2019, real GDP increased 2.1%. The GDP estimate released on Apr 29 is based on data that are incomplete or subject to further revision by the source agency. The "second" estimate for the first quarter, based on more complete data, will be released on May 28, 2020.

The decline in first quarter GDP was, in part, due to the response to the spread of Covid-19, as governments issued "stay-at-home" orders in March. This led to rapid changes in demand, as businesses and schools switched to remote work or canceled operations, and consumers canceled, restricted, or redirected their spending.