The coronavirus pandemic has pushed the world's largest economy towards recession, the United States government announced on Wednesday, as the country's gross domestic product (GDP) shrank at a 4.8 percent annual rate in the first quarter.
"The decline in first quarter GDP was, in part, due to the response to the spread of COVID-19, as governments issued "stay-at-home" orders in March", the BEA explained in its press release.
The Italian economy shrank 4.8% year-on-year in the first quarter, Istat said, less than the 5.2% contraction forecast by economists polled by The Wall Street Journal. Fed policymakers are now meeting and will release a statement, including their own assessment of the economy, at 2 p.m. (1800 GMT) on Wednesday.
Some fear the impact of the pandemic may only get more serious.
Many Americans, they suggest, could remain too fearful to travel, shop at stores or visit restaurants or movie theatres anywhere near as much as they used to. Confirmed US COVID-19 infections have topped one million, according to a Johns Hopkins University tally.
The Fed is on Wednesday wrapping up its first scheduled meeting since it lowered the benchmark lending rate to zero in March as the virus's potential for economic devastation became clear.
Consumer spending - which typically comprises about two-thirds of total GDP - plunged 7.6 percent in the quarter as states mandated businesses deemed non-essential to close and directed residents to stay at home.
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Zandi said he thought the economy could resume its growth in the July-September quarter before faltering in the final quarter of 2020 and then regaining its footing on a sustained basis in mid-2021 - assuming that a coronavirus vaccine is ready for use by then.
At this stage, the government expects the country's annual GDP to fall by 8% in 2020.
That would be the sharpest quarterly drop in GDP since the Great Recession, which ended in 2009.
"The next phases are more uncertain, highly uncertain, but we will go through a phase starting fairly soon where we begin to reopen the economy, and probably the economic activity will pick up, as consumer spending picks up", Powell said.
While declining imports helped narrow the trade deficit and contributed 1.30 percentage points to GDP last quarter, that meant no inventory was accumulated.
Business investment was also weak: It sank 2.6%, with investment in equipment down a sharp 15.2%.
Recent data from the Bureau of Labor Statistics showed that more than 26 million Americans filed jobless claims in a five-week period, as businesses, especially small ones, struggle to retain their employees amid shutdowns.