GDP report to show a damaged economy sliding into recession
A cyclist rides past shuttered businesses during the coronavirus outbreak on the boardwalk in Atlantic City, N.J. (AP Photo/Matt Rourke)

Atlantic City bike rider
Commerce Department report will say economy shrank 5% in first quarter.

The U.S. economy began 2020 riding the crest of a record-long expansion with every expectation that its 11th year of growth would not be its last.

Then the economy screeched to a sudden halt. And now it’s in free-fall.

On Wednesday, the government will offer a glimpse of how dark the picture has grown and how much worse it could get as the coronavirus pandemic inflicts ruinous damage. The Commerce Department is expected to estimate that the gross domestic product, the broadest gauge of the economy, shrank at an annual rate of 5% or more in the January-March quarter.

That would be the sharpest quarterly drop in GDP since the Great Recession, which ended in 2009. And it would be the first quarterly contraction in six years.

And yet forecasters say that will be only a precursor of a far grimmer GDP report to come for the current April-June quarter, when business shutdowns and layoffs have struck with devastating force. The Congressional Budget Office has estimated that GDP will plunge in the current quarter by a 40% annual rate. That would be, by a breathtaking margin, the bleakest quarter since such records were first compiled in 1947.

In just a few weeks, businesses across the country have shut down and laid off tens of millions of workers. Factories and stores are shuttered. Home sales are falling. Households are slashing spending. Consumer confidence is sinking.

As the economy slides into what looks like a severe recession, some economists are holding out hope that a recovery will arrive quickly and robustly once the health crisis has been solved — what some call a V-shaped recovery. Increasingly, though, analysts say they think the economy will struggle to regain its momentum even after the viral outbreak has subsided.

Many Americans, they suggest, could remain too fearful to travel, shop at stores or visit restaurants or movie theaters anywhere near as much as they used to. In addition, local and state officials may continue to limit, for health reasons, how many people may congregate in such places at any one time, thereby making it difficult for many businesses to survive. It’s why some economists say the damage from the downturn could persist far longer than some may assume.

“The recession will be worse than the one we went through from 2007 to 2009,” said Sung Won Sohn, economics and business professor at Loyola Marymount University in Los Angeles, referring to the downturn that came to be called the Great Recession because it was the worst slump since the Great Depression of the 1930s.

There is also fear that the coronavirus could flare up again after the economy is re-opened, forcing reopened businesses to shut down again.

“The virus has done a lot of damage to the economy, and there is just so much uncertainty now,” said Mark Zandi, chief economist at Moody’s Analytics.

Zandi said he thought the economy could resume its growth in the July-September quarter before faltering in the final quarter of 2020 and then regaining its footing on a sustained basis in mid-2021 — assuming that a coronavirus vaccine is ready for use by then.

“I would characterize this period as going through quicksand until we get a vaccine,” Zandi said.

The Trump administration takes a rosier view. President Donald Trump told reporters this week that he expects a “big rise” in GDP in the third quarter, followed by an “incredible fourth quarter, and you’re going to have an incredible next year.”

The president is predicating his re-election campaign on the argument that he built a powerful economy over the past three years and can do so again after the health crisis has been resolved.


Republished with permission from The Associated Press.

Scott Powers

Scott Powers is an Orlando-based political journalist with 30+ years’ experience, mostly at newspapers such as the Orlando Sentinel and the Columbus Dispatch. He covers local, state and federal politics and space news across much of Central Florida. His career earned numerous journalism awards for stories ranging from the Space Shuttle Columbia disaster to presidential elections to misplaced nuclear waste. He and his wife Connie have three grown children. Besides them, he’s into mystery and suspense books and movies, rock, blues, basketball, baseball, writing unpublished novels, and being amused. Email him at [email protected].


  • John Kociuba

    April 29, 2020 at 7:50 am

    Americans were apathetic towards Communism and all it’s vessels (now as a virus and control) to accept absolute destruction.

    Civil War will be fought in every livingroom in the United States. All Federal Agencies, leftist controlled cities, Rockefeller Republicans embrace Communist Specter and are under law your Constitutional ENEMIES!

    Indeed as failed USDOJ/FBI/HOMELAND INSECURITY/TSA amongst countless colleges, political think tanks, media outlets, social media giants, farming corporations, local/state police enact 10 Planks of the Communist Manifesto with impunity question begs?


    Enjoy this UNLAWFUL TYRANNY!

    • Ocean Joe

      April 30, 2020 at 12:15 pm

      I will re-arrange the furniture for the upcoming battle.

Comments are closed.


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