US economy suffers worst contraction in 74 years as Covid-19 surges

Among the actions the president took were orders to rejoin the Paris Climate Accord and end Trump’s travel ban on Muslim and African countries

The US economy contracted 3.5 per cent in 2020 amid the raging Covid-19 pandemic, the worst annual decline of the country's gross domestic product (GDP) since 1946, according to data released by the Commerce Department.

The data, unveiled on Thursday, also showed that the US economy grew at an annual rate of 4 per cent in the fourth quarter of 2020 amid an unabated resurgence, much slower than 33.4 per cent in the previous quarter, reports Xinhua news agency.

Despite a partial economic rebound in the second half of last year, the economy shrank 3.5 per cent for the whole year of 2020, compared with an increase of 2.2 per cent in 2019, according to the Department.

It also marked the first negative annual growth in the US GDP since 2009.

The data came as the US has registered a total of 25,739,405 coronavirus cases and 432,864 deaths, the two tallies currently accounting for the world's highest.

A day earlier, Federal Reserve Chairman Jerome Powell said on Wednesday that the pace of recovery has "moderated" in recent months, with the weakness concentrated in the sectors most adversely affected by the resurgence of the virus and greater social distancing.

Late last year, Congress had approved a $900 billion Covid-19 relief package following months of deadlock over the size and scope of the package.

But economists and some lawmakers say it isn't enough to bolster a ravaged economy.

President Joe Biden also unveiled a $1.9 trillion Covid-19 relief proposal, but it has drawn draws opposition from a growing number of congressional Republicans.

It's unclear whether the Biden administration would secure enough votes for the massive relief package.

--IANS

ksk/


(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)


Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel