On Thursday, US Commerce Department said in a statement that the world’s largest economy had contracted by the steepest pace in more than 74 years in 2020 as a still-raging pandemic outbreak upended consumer spending, severely foundered business environment and led to a mass-scale lay off wave that reportedly sent millions of Americans out of work.
In point of fact, a recovery had been underway since US Senate had passed a trillion-dollar pandemic stimulus bill including a one-off $1,200 in pay-check back in April last year, nonetheless, after exhausting as many as $3 trillion in pandemic associated relief aids, the US Government appeared to have failed to shrug off the fiscal blows that were stemmed off the pandemic following a resurgence in cases later last year.
Besides, following the day’s Commerce Department report that said the US economy had contracted by the most since World War II last year, several analysts were quoted saying that the economy’s prospects largely clung on to an even and quicker distribution of the pandemic vaccine, while US President Joe Biden’s proposal of a $1.9 trillion in fresh capital inflows to offset the fiscal impacts of the outbreak appeared to be a last line of defence amid a near-stagnant labour market alongside a sharp drop in re-hiring.
US GDP posts biggest drop in 74 years in 2020
In tandem, according to US Commerce Department data released earlier in the day, the United States had witnessed a contraction of 3.5 per cent in 2020 following a 4 per cent rise in fourth-quarter GDP (Gross Domestic Product), the US economy’s largest plunge since 1946 that followed a 2.2 per cent growth in 2019, while a landfall of latest shocking data had also marked up the economy’s first annual decline in GDP since the era of Great Financial Depression in 2007-09.
Meanwhile, adding that the Commerce Department report had highlighted a sheer urgency for a Democratic-led US Senate to pass the President Joe Biden’s plan, White House economic advisor Brian Deese said following the data, “Without swift action, we risk a continued economic crisis that will make it harder for Americans to return to work and get back on their feet”.