The Strategist

2020 becomes the worst for the US economy since WWII

01/29/2021 - 04:06

According to a report from the US Department of Economy, the country's GDP for the fourth quarter of 2020 grew by 4% compared to the previous quarter, which was the highest growth rate in the history of statistics.

However, compared to the previous year the US economy shrank by 2.5% in the fourth quarter and in the full year the country's GDP shrank by 3.5% year-on-year. This is the worst performance of the US economy since 1946.

Such a notable contraction of the US economy was caused by the COVID-19 epidemic and massive business closures in the first half of the year. When businesses reopened in September, the country's GDP accelerated markedly, but the second wave of the coronavirus infection did not allow the economy to fully recover from such a powerful shock. 

According to analysts' forecasts, this should happen as early as 2021, when the epidemic can be brought under control. Thus, the International Monetary Fund expects the US economy to grow by 5.1% in 2021, while economists polled by The Wall Street Journal forecast growth of 4.3%.

Meanwhile, the Labour Department reported another week of claims filed by US citizens for unemployment benefits. There were 847,000 such applications in the week ending 23 January, down by 67,000 from the previous week.