U. S. Economy has its worst quarter since 1947
CHATTANOOGA, Tenn. (WDEF)- The U.S. economy experienced its worst drop on record since the Coronavirus began.
The government released two key reports this morning that shows how COVID-19 is affecting our economy.
According to the commerce department, the gross domestic product, or the GDP fell by an annual rate of 32.9% in the second quarter.
The GDP is the total measure of the economy.
The report shows that even with businesses reopening, the second quarter was the worst since records started in 1947.
Chris Hopkins, the Vice President of Barnett and Company and a Financial Advisor, says, “We all see that more businesses are open and there’s more activity and that’s a good thing. But, the signs are, we kind of sprung out of the bottom but now things are flattening out and we may end up having another downturn in the fourth quarter and into the first if we have to do another semi shutdown.“
The GDP dropped 5% in the first quarter.
Some economists define a recession if there are two consecutive quarters of declining GDP.
Small businesses such as Nooga Shuttle started off 2020 very strong. Even seeing sales in January increase to up to 500%. But now, here in July, sales are down drastically.
David Alverson, the Owner of Nooga Shuttles says, “March hit and we went down to about 60 percent, April was to about 60 percent and May was 90 percent.”
Alverson says that he is just happy that his family owned business survived during these uncertain times.
“It was scary at first. We didn’t know if we were going to survive like a lot of businesses. We deal with a lot of limousine companies around the country and a lot of those didn’t survive”, adds Alverson.
20% of small businesses remain closed.
Economists expect that by the second quarter of 2021, the GDP could be back on track.
“We get back to the same growth rate we were at maybe a year from now. But, it’s going to take us another 7, 8, 9 years after that to make up everything that we lost”, adds Hopkins.