Economy suffers record-breaking GDP fall due to COVID-19

ABC News’ Rebecca Jarvis explains the significance of the U.S. economy’s 32.9% drop last quarter.
3:13 | 07/31/20

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Transcript for Economy suffers record-breaking GDP fall due to COVID-19
Millions of Americans have been personally feeling the impact of this economic downturn and today we learned that the US economy as a whole measured by real GDP contracted a record shattering 32 point 9% last quarter. To break all this down what it means agreed ABC's chief business correspondent Rebecca Jarvis thanks so much for joining us put this nearly 33%. Drop in to perspective mean how does this compare to other economic lows and how hard it will be to get back to pre pandemic growth. Well Lindsey its historic no matter how you look at it is worse for a single quarter than we ever saw during the Great Recession it's worst than we ever saw for a single quarter. During the great depression and if you think about it it's not entirely unexpected the economy here in the United States was entirely shut down. For most of the last. For months and really when you think about your own spending if you look at your credit card statement for example your seat. A reflection of the fact that you weren't going to the gas station you weren't buying copies very likely that you probably weren't shopping. For very much other than food and that's the thing we're a consumer driven economy consumers. Were told to stay home they were laid off in furloughed from jobs and that's exactly what this is a reflection of the big question is what now now is things begin to reopen what kind of rebound will we see we will see some sort of rebound but in order to climb back to where we were pre pandemic. That's going to take a while and the Congressional Budget Office which is nonpartisan crunch the numbers and they believe that over the next ten years. This pandemic will cost our economy here in the United States sixteen trillion dollars Lindsay. And this data covers the months that we were in lockdown the president's spokesperson today pointed out that we shouldn't assume that the economy will stay this way and that more than seven million jobs were created ones businesses reopened so what economists say about that. Well that occurred in this latency is that as we've seen the economy reopen and some people have been rehired and in fact they were rehired especially towards the middle of may and Juno and at very quick rates. The problem is that that hasn't held on and in fact today the other data point that we got in addition to GDP is the number of layoffs that we saw last week and that number it's climbing we saw more than one point four million Americans filed first time claims for unemployment that means. One point four million plus new layoffs last week and the number of unemployed Americans. Happens to be climbing now as a number of states returned they roll back these reopening. And also consumers. As we talked about so many times here before we as consumers have a lot of control over what happens in the US economy if we're not spending money. Then the US economy isn't growing and when jobs are at risk when health and our our health is a question mark. People spends differently and that is bad for the economic growth of this country. Rebecca Jarvis thank you so much for your time and just explaining it in a way that we can all understand we appreciate it.

This transcript has been automatically generated and may not be 100% accurate.

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