Posted April 29, 2020

GDP down 4.8 percent in first quarter

Real gross domestic product (GDP) decreased at an annual rate of 4.8 percent in the first quarter of 2020, according to the advance estimate released by the Bureau of Economic Analysis.

In the fourth quarter of 2019, real GDP increased 2.1 percent.

The nearly 5 percent decline was the worst quarter of U.S. growth since the Great Recession in 2009.

The decrease in real GDP reflected negative contributions from personal consumption expenditures (PCE), nonresidential fixed investment, exports, and private inventory investment that were partly offset by positive contributions from residential fixed investment, federal government spending, and state and local government spending.

The decline in first quarter GDP was, in part, due to the response to the spread of COVID-19, as governments issued "stay-at-home" orders in March. This led to rapid changes in demand, as businesses and schools switched to remote work or canceled operations, and consumers canceled, restricted, or redirected their spending. The full economic effects of the COVID-19 pandemic cannot be quantified in the GDP estimate for the first quarter of 2020 because the impacts are generally embedded in source data and cannot be separately identified, according to the BEA.