US GDP contracts 5pc, most since Great Recession

Business | Reuters and Bloomberg 29 May 2020

The US Commerce Department said gross domestic product contracted at a 5 percent annualized rate in the first quarter, the deepest drop in output since the 2007 to 2009 Great Recession. The number was more than the 4.8 percent pace estimated last month, as consumer spending and business investment dropped sharply.

In a separate report released yesterday, initial jobless claims for regular state programs totaled 2.12 million in the week ended May 23, while benefit rolls declined for the first time during the pandemic.

Meanwhile, other countries provided a mixed picture of post-coronavirus recovery.

Australia's economic downturn is likely to be less severe than first thought, meaning negative interest rates or extra quantitative easing measures will likely not be required, Reserve Bank of Australia Governor Philip Lowe said yesterday.

Japan's government gave a bleaker view on exports in a monthly report in May as the world's third-largest economy grapples with the fallout of the global coronavirus pandemic.

Prime Minister Shinzo Abe's cabinet on Wednesday approved a new US$1.1 trillion (HK$8.58 trillion) stimulus package that includes significant fiscal spending in an effort to cushion the economic blow.

Taiwan's economy, a key part of the global technology supply chain, is likely to grow 1.67 percent this year, the Directorate General of Budget, Accounting and Statistics said yesterday, again downgrading its outlook.

Britain's economy is at risk of taking longer to recover from the impact of the coronavirus than in the main scenario published by the Bank of England earlier this month, Governor Andrew Bailey said on Wednesday.

More than one in six young people have stopped working since the onset of the coronavirus crisis, the International Labour Organization said.

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