The pandemic recession — and the widespread U.S. business closures it spawned — weighed on nearly all industries, as restaurants, hotels and entertainment businesses fared the worst.
U.S. gross domestic product shrank at a 31.4% annualized rate in the second quarter, the Commerce Department’s third estimate showed Wednesday. Twenty of 22 industry groups contributed to the decrease in output during the period. The category of arts, entertainment, recreation, accommodation and food services plummeted an annualized 91.5% and subtracted about 6.6 percentage points from GDP.
Covid-19 and the measures taken to curb its spread catapulted the U.S. economy into the deepest contraction since at least the 1940s. Retail sales and housing are among some areas of the economy that have since rebounded, surpassing pre-pandemic levels and setting up third-quarter economic growth to be the strongest on record.
The MNI Chicago Business Barometer on Wednesday jumped in September to the highest reading since the end of 2018, underscoring a resurgence in manufacturing. Orders and production grew at faster rates than a month earlier.
The labor market, however, still has a long way to go. The total value of economic output will likely remain below pre-pandemic levels when the government issues its first GDP estimate for the July to September period on Oct. 29.