The U.S. economy shrank 3.5 percent in 2020 as the coronavirus pandemic shuttered businesses, schools and events, marking the first annual contraction since the Great Recession, according to data released by the Commerce Department on Thursday.
U.S. gross domestic product (GDP) suffered its largest annual decline since 1946 due to the coronavirus pandemic, according to the Commerce Department release. The outbreak of COVID-19 caused the steepest economic collapse since the Great Depression, wiping out more than 20 million jobs and years of economic growth within two months.
Consumer spending — which makes up nearly two-thirds of the U.S. economy — fell 2.6 percent in 2020, driven mainly by a 3.4 percent decline in spending on services. Spending on goods rose 0.8 percent, however, as purchases shifted from gatherings to products that could be used during lockdowns.Economy shrank 3.5 percent in 2020 | TheHill