The U.S. economy shrank at an annualized 32.9% rate in the second quarter — the worst-ever contraction with records dating back to 1947, the government said on Thursday.
Why it matters: Widespread lockdowns to contain the spread of the coronavirus pandemic from ravaged the economy in a way that's never been seen in modern times, and hope for a swift recovery has been dashed as cases have surged nationwide.
Between the lines: The staggering contraction beats the last record set in 1958, when GDP shrank at an annualized 10% rate.
Worth noting: U.S. government data always "annualizes" the quarterly GDP figures — meaning the number assumes the pace the economy grew or shrunk last quarter will continue over the year.
- Because the economy experienced a swift, marked deterioration in the second quarter that's unlikely to be repeated, economists are also looking at another figure: GDP's percent change from the first quarter to the second.
- Either figure you look at still shows an ugly, historic economic contraction.