Advance Estimates Explain Struggling U.S. Economy and GDP

WASHINGTON, DC – Though there are signs that the economy is improving after being shut down due to COVID-19 concerns, an “advance” estimate from the Bureau of Economic Analysis tells a different tale.

Real gross domestic product (GDP) contracted at a record seasonally adjusted annual rate of 32.9 percent this past Spring (second quarter of 2020) after having fallen 5 percent during the first quarter of 2020.

As consumers and businesses canceled, restricted, or redirected their spending, the economy was left to bear the brunt of the impact. Real GDP declined in the second quarter as a result of negative contributions in personal consumption expenditures (PCE), exports, private inventory investment, nonresidential fixed investment, residential fixed investment, and state and local government spending but was partly offset by federal government spending.
(SOURCE: American Bankers Association)