Coronavirus hammers US economy – 2020 was worst year since 1946
- US economy shrank 3.5 per cent in 2020 after growing 4 per cent last quarter
- Pandemic inflicted the worst economic freeze since the end of World War II
The world’s largest economy shrunk by 3.5 per cent in 2020, the Commerce Department reported on Thursday, after Covid-19 rearranged daily life and forced many businesses to shut down or change their operations while laying off workers in droves.
Those mass lay-offs, which began in March as the pandemic intensified, continue to take a toll, with the Labour Department reporting nearly 1.3 million new claims for unemployment benefits filed last week.
But by this point, analysts agree there’s only so much the government can do to support the economy, which won’t be back to normal until the raging virus is done away with or has at least been brought to manageable levels.
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“Additional fiscal stimulus and broader vaccine diffusion should support an improved labour market in the spring, but claims are expected to remain high in the near term as the pandemic continues to restrict activity, with new strains of the virus a concern,” Nancy Vanden Houten of Oxford Economics said.
The pandemic caused an unheard-of whipsaw in the growth, with the economy contracting a record 31.4 per cent annualised in the second quarter of 2020 when the pandemic’s restrictions were at their most severe, then shooting back up 33.4 per cent the next quarter as businesses reopened.