US GDP shrank 4.8% Q1, biggest contraction since 2008 financial crisis

Gross domestic product fell 4.8 percent in the first quarter, according to government numbers released Wednesday that provide the first detailed glimpse into the deep damage the coronavirus wreaked on the U.S. economy.

Economist surveyed by Dow Jones had expected the first estimate of GDP to show a 3.5 percent contraction.

This marked the first negative GDP reading since the 1.1% decline in the first quarter of 2014 and the lowest level since the 8.4 percent plunge in Q4 of 2008 during the worst of the financial crisis.

The biggest drags on the economy were consumer spending, nonresidential fixed investment, exports and inventories. Residential fixed investment along with spending from both the federal and state governments helped offset some of the damage.

Consumer expenditures, which comprise 67 percent of total GDP, plunged 7.6 percent in the quarter as all nonessential stores were closed and the cornerstone of the U.S. economy was taken almost completely out of commission.

Most economists see the U.S. in recession already even though the technical definition is generally two consecutive quarters of negative growth. The fourth quarter of 2019 saw GDP rise 2.1 percent.