The COVID-19 health pandemic battered the U.S. economy for most of 2020, causing the largest economic shortfall in nearly 75 years, the Hawaii Tribune Herald reported.
The U.S. economy grew 4% for the last quarter of 2020, ending at 3.5% less for the year overall compared to 2019.
A government report showed that the pandemic caused the nation’s gross domestic product (GDP) to plummet sharply by 31.4% in the April-June quarter. It rallied in the July-September quarter climbing by 33.4%, but dropped off again sharply in the October-December quarter.
The annual decline in GDP for 2020 was the first such decline since a 2.5% fall in 2009 during the recession following the 2008 financial crisis. The sharpest decline before that was a 11.6% decreased in 1946, when the economy was demobilizing after World War II.
The pandemic has left the nation in a deep recession, with millions of American’s unemployed, thousands of businesses shuttered and more than 400,000 Americans dead as a result of the deadly virus.
The economic outlook for 2021 is still unclear, but economists predict that a recovery will depend on nationwide administration of the COVID-19 vaccine and significant government financial relief.
The rollout of the vaccine is predicted to revive economic growth.
“The vaccine rollout is essential,” Gregory Daco, chief economist at Oxford Economics said. "Without an improving health situation, we are not going to get any improvement in the economic situation."
Daco said that increased government aid from President Joe Biden’s $1.9 trillion relief package and spending of pent-up savings from higher-income families will help boost recovery. The $900 billion federal aid package from last year is also providing some support up until mid-march.
After that aid expires, many economists warn that the economy will risk falling into another recession without further government financial relief.