The U.S. economy shrank 3.5 percent in 2020, marking the worst performance since 1946 as the coronavirus pandemic weighed on business activities and left millions out of work, Commerce Department data showed Thursday.
While the world's largest economy is recovering from the depths of the initial pandemic-induced plunge, the annualized real gross domestic product in the October to December period grew by only 4.0 percent, a sharp slowdown from the 33.4 percent growth in the preceding quarter.
Private consumption, which accounts for two-thirds of the world's largest economy, grew 2.5 percent in the final quarter of 2020 after jumping 41.0 percent in the July-September period.
Nonresidential private investment, a measure of business spending, rose 13.8 percent, following a surge of 22.9 percent.
Exports and imports gained 22.0 percent and 29.5 percent, respectively, in the October-December quarter.
Government spending was down 1.2 percent, after falling 4.8 percent in the previous three-month period.
The U.S. economy contracted 31.4 percent in the April-June period, the largest quarterly shrinkage since comparable data became available in 1947, amid widespread shuttering of businesses and stay-at-home orders due to the pandemic.
A subsequent easing of restrictions has led to the reopening of businesses and resumption of other economic activities to some extent, but a resurgence of the novel coronavirus in recent months has again overshadowed the economic outlook.
U.S. President Joe Biden, who took office last week, has called for a $1.9 trillion stimulus package to aid the country's economic recovery and is working to accelerate vaccinations among the public.
Federal Reserve Chairman Jerome Powell on Wednesday pointed to an "improved outlook for later this year," but noted that the United States is still "a long way from a full recovery" with many people left unemployed and small businesses under pressure.
The last time the U.S. economy contracted for a full year was in 2009 in the wake of the global financial crisis triggered by the collapse of Lehman Brothers the previous year, with the GDP at that time recording a 2.5 percent fall.
In 1946, the year after the end of World War II, the U.S. GDP plunged 11.6 percent.
GDP measures the total output of goods and services within a country's borders.
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