US economy slumped 3.5 percent in 2020

finance

US economy slumped 3.5 percent in 2020

Second corona wave slows US growth

The US economy slumped by 3.5 percent last year due to the corona crisis. That was the sharpest decline in economic output since 1946 after the end of World War II, according to US government data.

The data was the first estimate of economic development over the past year. The extent of the recession was in line with most analysts' current expectations. In the first half of the year, most economists had expected an even worse slump, but the economy stabilized again in the second half of the year.

Most recently, the US economy contracted for the whole of 2009 as a result of the global financial crisis. According to the official data, a slump as severe as in 2020 had not been registered since 1946. At that time, economic output had declined by 11.6 percent.

In the fourth quarter of 2020, the world's largest economy grew by 4 percent projected over the year. According to the usual approach in Germany, this would correspond to a growth of around 1 percent compared to the previous quarter.

The coronavirus pandemic determined economic development in the USA in 2020 as well. The second quarter was devastating due to the worsening pandemic and far-reaching lockdowns, while the economy recovered significantly in the third quarter. The weak growth in the months from October to December combined with persistently high unemployment indicated, however, that the economic recovery has now stalled.

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