Germanys Covid-induced Q2 GDP plunge wiped off 10 years of growth

People dine in parking spaces on the street outside CEBU restaurant on the first day of the phase two re-opening of businesses following the outbreak of the coronavirus disease in Brooklyn New York

Gross domestic product from April to June plunged 32.9%, according to the Department's first reading on the data.

While a recovery appeared to begin in May when the country recorded the largest month-to-month jobs increase ever, the positive numbers were unable to offset the historic decline the US economy experienced at the start of the pandemic.

Between the lines: The staggering contraction beats the last record set in 1958, when GDP shrank at an annualized 10% rate.

Compared to the same quarter of 2019, economic activity fell 9.5 percent. Individuals increased consumption of recreational goods & vehicles and housing & utilities, but lessened consumption of gasoline & other energy goods, health care, transportation services, recreational services, and food services & accommodation.

On an annual basis, its economy contracted 11.7% despite reopening businesses that followed coronavirus-induced restrictions in the first quarter.

The data show trade also took a huge hit, with exports falling just over 64 percent, and imports down 53.4 percent.

The drop in GDP figures came as a combination of sharp declines in personal consumption, spending and investments, with the personal consumption expenditures price index dropping to 1.9% in Q2. Exports and imports were both down more than 20% from a year ago, while consumer spending - the main driver of the U.S. economy - fell 10.7% year-on-year. "Americans are not behaving well in terms of social distancing, the infection rate is unacceptably high and that means economic growth can not gain any traction".

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As well, businesses in cities across the US found themselves under siege as protests turned into riots and looting.

However, the jobless rate for July held steady at 6.4%, unchanged from June in a sign that the initial effects of the pandemic were easing. Although roughly in line with expectations, it was the second week in a row of increased unemployment filings. Current-dollar personal income rose more than six-fold to $1.39 trillion, while disposable personal income shot up 42.1% to $1.53 trillion.

Reduced spending on services such as healthcare drove the fall.

But Germany has been less affected by the virus than other European countries and second-quarter output data due on Friday could reveal much deeper downturns in other parts of the continent.

Experts are confident that a recovery process will begin in the third quarter.