The U.S. Economy shrank by 3.5% last year, the worst year of growth since 1946, one year after World War II ended, mostly due to the coronavirus pandemic.
The coronavirus brought a booming economy to a screeching halt as it overwhelmed the U.S. Millions of Americans lost their jobs seemingly overnight and quarantine restrictions sent everybody indoors. While some industries easily switched to conducting business in the digital world, other industries like the travel and hotel, restaurant and dining and entertainment all suffered last year and the outlook for this year isn’t much better.
According to ABC News, the Commerce Department estimated the nation’s gross domestic product, the total output of goods and services, dropped significantly between October and December 2020, from a record 33.4% surge between July and September.
That gain followed a free fall in between April and June when millions of jobs were lost and the resurgence of the Black Lives Matter movement started after the death of Breonna Taylor and George Floyd.
The pandemic and the resulting economic downfall ended more than a decade of growth after the 2008 housing crisis.
2020 was easily the worst year for economic growth since World War II when the economy shrank 11.6%. Despite the numbers and the fact that at least 200,000 more people have died than Trump predicted, things are getting better.
For starters, unemployment has dropped from its peak at 14.7% in April 2020 to 6.7% in December. Oxford Economics currently describes the economy as “chilled, but not frozen,” according to The Guardian, as they do not expect the economy to grow to a pre-coronavirus level until later this year.
“Against the risk of excessive winter pessimism, we believe in spring optimism. We foresee record-breaking consumer spending growth in 2021 with households benefiting from a watered-down $1.2tn version of Biden’s American Rescue Plan, vaccine diffusion gradually reaching two-thirds of Americans by July and employment accelerating this spring. After a 3.5% contraction in 2020, we foresee the economy expanding around 5.5% in 2021,” the economists wrote in a letter to their investors, according to the Guardian.
Another bright spot is Trump is no longer the president, meaning the recovery will be run and initiated by those who have experience in their roles. The Biden Administration has also pledged to deliver more vaccines to states as it tries to repair the initial mistakes of the vaccine rollout. The Biden Administration is also trying to gain support for its $1.9 trillion relief bill.