COVID-19 sends GDP plummeting

WASHINGTON—The U.S. Commerce Department on Thursday reported a 33 percent annualized drop in the gross domestic product in the second quarter of 2020. That’s triple any other quarterly economic loss since the department first released estimates in 1947. Last quarter became the second in a row with a GDP decrease after years of sustained growth.

How is the GDP calculated? The measurement of the total output of goods and services for each quarter relies heavily on consumer spending, which makes up 70 percent of economic activity in the United States. Coronavirus-related travel restrictions and business closures over the past few months decimated such spending. Many experts predict a bounce back during the third quarter, but that depends on the progress of reopening economies in states across the country.

Dig deeper: Read Charissa Koh’s report in Compassion on renters who face eviction during the pandemic.