The US Bureau of Economic Analysis reported in an Advance Estimate today that US Gross Domestic Product shrank at a seasonally adjusted annual rate of 32.9% in 2Q2020.
An update will be released on 27 August.
US BEA Analysts noted:
"The full economic effects of the COVID-19 pandemic cannot be quantified in the GDP estimate for the second quarter of 2020 because the impacts are generally embedded in source data and cannot be separately identified."
Wall Street analysts had been expecting a 35% decline in GDP for the quarter.
The decrease in GDP was driven by a 34.6% annualized reduction in consumer spending - particularly in travel, tourism, food service and medical services - as businesses remained closed and millions of people were out of work.
Federal government spending was up by 17%, offsetting a 5.6% decline in state and local spending.
Economists polled expect the economy to grow by 18% in 3Q2020, but tensions with China and recent resurges of COVID-19 will be limiting factors, and full recovery could take "months or even years".
Both the Dow (-1.14%) and the S&P (-0.73%) indices fell sharply in Thursday trades.