Economy registers unfavorable annual decline

Published:

On: Jan 2021

Official statistics showed that the US economy faced its worst yearly plunge for 74 years in 2020 because the coronavirus pandemic hindered the entire business activity of the country. Reportedly, the gross domestic product (GDP) decreased by 3.5 percent which is the largest decline since 1946 when the United States was demobilising after the 2nd World War.

Output figures are rebounding after the lowness of the health crisis initially in the year but down to pre-pandemic levels and slower bounce-back in the final quarter of the last year amid a resurgence in virus cases. Prospects of the US economy look likely to link on the distribution of vaccinations to fight the COVID-19.

The GDP data represented the need for the United States lawmakers to approve new US president Joe Biden’s $1.9 trillion stimulus package. Around $3 trillion in aid has been assigned already with an amount of $900 billion that passed in December 2020 under former president of the country Donald Trump. America recorded a 2.2 percent downturn in 2019, which is the 1st ever yearly drop since the worldwide fiscal crisis of 2007-2009.

However, this figure is much lower than the 10 percent GDP plunge that is anticipated to have been experienced by Britain. Whereas, the UK figures are likely to issue next month. The world’s second-largest economy, China bounced back powerfully than its worldwide rivals from the coronavirus pandemic to stake historically-low but still positive annual growth of 2.3 percent. The previous year’s downturn was illustrated by a 3.9 percent decrement in consumer spending, which is its worst performance since 1932.

The United States was in recession for the early portion of the year before a rebound to record growth in the 3rd quarter which was 33 percent at a yearly rate. But the pace lowered to four percent in the Q4 because of the revised business disruptions after infection numbers gained again, with major postpones in offering the recent government aid package. Earlier this week, the Federal Reserve of the United States ease interest rates near zero and promised to continue supplying money into the US economy via different bond purchases.