Virus wipes out 5 years of U.S economic growth

The coronavirus pandemic’s toll on the nation’s economy became emphatically clearer Thursday as the government detailed the most devastating three-month collapse on record, which wiped away nearly five years of growth.

Gross domestic product, the broadest measure of goods and services produced, fell 9.5 percent in the second quarter of the year as consumers cut back spending, businesses pared investments and global trade dried up, the Commerce Department said.

The drop — the equivalent of a 32.9 percent annual rate of decline — would have been even more severe without trillions of dollars in government aid to households and businesses.

But there is mounting evidence that the attempt to freeze the economy and defeat the virus has not produced the rapid rebound that many envisioned. A surge in coronavirus cases and deaths across the country has led to a renewed pullback in economic activity, reflecting consumer unease and renewed shutdowns. And much of the government support is on the verge of running out, with Washington at an impasse over next steps....

Data from Europe shows what might have been. Germany on Thursday reported a drop in second-quarter G.D.P. that was even steeper than the U.S. decline. But in Germany, coronavirus cases fell sharply and remain low, which has allowed a much stronger economic rebound in recent weeks.

In the United States, the rebound appears to have stalled. More than 1.4 million Americans filed new claims for state unemployment benefits last week, the Labor Department said Thursday. It was the 19th straight week that the tally exceeded one million, an unheard-of figure before the pandemic. A further 830,000 people filed for benefits under the federal Pandemic Unemployment Assistance program, which supports freelancers, the self-employed and other workers not covered by traditional unemployment benefits.