US economy likely suffered historic plunge in Q2; outlook grim due to virus

Federal Reserve Chair Jerome Powell on Wednesday acknowledged the slowdown in activity

The US economy likely contracted at its steepest pace since the Great Depression in the second quarter as the Covid-19 pandemic destroyed consumer and business spending, potentially wiping out more than five years of growth.

The bulk of the historic plunge in gross domestic product expected to be reported by the Commerce Department on Thursday occurred in April when activity almost ground to an abrupt halt after restaurants, bars and factories among others were shuttered in mid-March to slow the spread of coronavirus.

Though activity picked up starting in May, momentum has slowed amid a resurgence in new cases of the illness,