Economy shrank 3.5 percent in 2020
By Niv Elis and Sylvan Lane - 01/28/21 08:47 AM EST
The U.S. economy shrank 3.5 percent in 2020 as the coronavirus pandemic shuttered businesses, schools and events, marking the first annual contraction since the Great Recession, according to data released by the Commerce Department on Thursday.
U.S gross domestic product (GDP) suffered its largest annual decline since 1946 due to the coronavirus pandemic, according to the Commerce Department. The outbreak of COVID-19 caused the steepest economic collapse since the Great Depression, wiping out more than 20 million jobs and years of economic growth within two months.
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U.S. GDP increased by an annualized rate of 4 percent in the final three months of 2020, according to the data released Thursday, following an annualized gain of 33.4 percent in the third quarter and and 31.4 percent annualized decline in the second quarter. But the economic rebound staged in the second half of 2020 has been dampened by the rapid spread of COVID-19 throughout the country.
Roughly 9 million jobs lost during onset of the pandemic have yet to be recovered, and those without work have struggled to get by with swaths of the economy still largely shut down by the virus. The federal government approved more than $4 trillion to fund pandemic response and economic rescue, though Democratic lawmakers and many economists say more is still needed.