US economy plunges record 31.4% in spring but big rebound expected

The U.S. economy plunged at a record rate in the spring but is poised to swing to a record increase in the quarter that just ended.

The Commerce Department reported Wednesday that the gross domestic product, the economy's total output of goods and services, fell at a rate of 31.4 per cent in the April-June quarter, only slightly changed from the 31.7 per cent drop estimated one month ago.

The new report, the government's last look at the second quarter, showed a decline that was almost four times larger than the previous record-holder, a fall of 10 per cent in the first quarter of 1958 when Dwight Eisenhower was president.

Economists believe the economy will expand at an annual rate of 30 per cent in the current quarter as businesses have re-opened and millions of people have gone back to work.

That would shatter the old record for a quarterly GDP increase, a 16.7 per cent surge in the first quarter of 1950 when Harry Truman was president.

The government will not release its just-ended July-September GDP report until October 29, just five days before the presidential election.

While President Donald Trump is counting on an economic rebound to convince voters to give him a second term, economists said the economy's future is far from certain.

Many are forecasting that growth will slow significantly in the final three months of this year to a rate of around 4 per cent and could actually topple back into a recession if Congress fails to pass another stimulus measure or if a rising number of coronavirus cases sharply curtails economic activity.