Advance Q1 GDP for 2020 Fell 4.8%, Fueled By ‘Stay-at-Home’ Orders in March

Coronavirus Mitigation Efforts Leads to First Negative Reading Under Trump Administration

Washington, D.C. (PPD) — The Bureau of Economic Analysis (BEA) reported the advance estimate for Q1 GDP in 2020 came in at -4.8%, worse than the consensus forecast. In Q4 2019, real GDP rose 2.1%.

Forecasts for ranged from a low of -7.0 to a high of -0.3. The consensus forecast was 3.7.

The decline in first quarter GDP was, in part, due to the response to the spread of COVID-19, as governments issued “stay-at-home” orders in March. This led to rapid changes in demand, as businesses and schools switched to remote work or canceled operations, and consumers canceled, restricted, or redirected their spending. The full economic effects of the COVID-19 pandemic cannot be quantified in the GDP estimate for the first quarter of 2020 because the impacts are generally embedded in source data and cannot be separately identified.

U.S. Bureau of Economic Analysis (BEA)

This is the first negative reading for GDP under the Trump Administration. Under the Obama Administration, the first quarter was either negative or very weak. It was a trend that — until now — had reversed under the current president.

Real consumer spending came in at -7.6%, missing the consensus forecast. The range was from a low of -6.3% to a high of -0.5%. The consensus was -1.5%.

This article will be updated shortly.