by Don McCaleb
U.S. Gross Domestic Product shrank by 4.8 percent in the first quarter of the year, a result of stay-at-home orders that shuttered businesses in response to COVID-19.
It was the first negative GDP since the first quarter of 2014 showed a 1.4 percent decline and the largest drop since the fourth quarter of 2008, when it fell 8.4 percent during the Great Recession.
“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,” the U.S. Bureau of Economic Analysis said in a statement. “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.”
More than 26 million Americans have filed unemployment claims over the past five weeks. Retails sales dropped by 8.7 percent in March.
Gross Domestic Product is the total market value of goods and services produced over a specific time period. It is viewed as a measure of a country’s economic health.
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Dan McCaleb is the executive editor of The Center Square. He welcomes your comments. Contact Dan at [email protected].