GDP down 4.8 percent in first quarter of 2020: And we’re just getting started
U.S. gross domestic product dropped 4.8 percent in the first quarter of 2020, according to the Bureau of Economic Analysis, with the decline in healthcare spending accounting for 57.5 percent of the retraction.
Spending on healthcare was at $2.41 trillion in the first three months of the year, down from the $2.52 trillion spent on healthcare in the fourth quarter of 2019.
That’s a drop of 4.3 percent, and consider that only the last three weeks of the quarter were impacted by the COVID-19 lockdowns instituted in most states across the country.
Overall GDP was down from $21.73 trillion in the fourth quarter of 2019 to $21.54 trillion in the first quarter of 2020.
Economic output dropped below where it was in the third quarter of 2019, which was measured at $21.54 trillion.
Other movers in the sectors
- Food services and accommodations spending was down $81.5 billion in Q1, from $1.04 trillion in Q4 of 2019 to $953.5 billion in the first three months of 2020, a 7.9 percent decrease.
- Motor vehicles and parts spending was down $53.0 billion, from $541.0 billion in the fourth quarter of 2019 to $488.0 billion in the first quarter of 2020, a 9.8 percent decrease.
- Recreation services spending was down $51.9 billion, from $602.5 billion in the fourth quarter of 2019 to $550.6 billion in Q1 of 2020, an 8.6 percent decrease.
- Clothing and footwear sales were down $39.9 billion, from $400.6 billion in Q4 of 2019 to $360.7 billion in Q1 of 2020, a 9.9 percent decrease.
- On the positive side, we had food and beverages for off-premises consumtion, i.e. groceries, up $68.3 billion, from $1.04 trillion in Q4 of 2019 to $1.11 trillion in the first quarter of 2020, a 6.6 percent increase.
- Also up: housing and utilities spending ($25.8 billion, from $2.71 trillion to $2.74 trillion, a 1 percent increase, and financial services and insurance ($19.4 billion, from $1.18 trillion to $1.2 trillion, a 1.6 percent increase).
- Oh, also up, government spending, a modest (for now) $36.8 billion, from $3.81 trillion in Q4 to $3.85 trillion in Q1, a 1 percent increase, but we’re just getting started there.
Story by Chris Graham