The United States economy shrank in the last year of the Trump Administration by 3.5%, its worst performance since 1946, as the nation struggled with the impact of the coronavirus pandemic with the federal government providing no leadership, the Washington Post reports.
While the fourth quarter saw an annualized increase of 4% in the fourth quarter, it could not impact the annual loss. The 3.5% loss surpassed the 2.9% loss experienced during the Great Recession of 2008-2009.
Personal income fell, as did spending on services, a cornerstone of the US economy. While spending on leisure and hospitality dropped dramatically, spending on home improvements and products like computers and electronics increased as people prepared for extended stay-at-home conditions.
The Federal Reserve forecasts that the economy is still in a tenuous position and will continue to be until there’s widespread availability and acceptance of coronavirus vaccines.
“That is really the main thing about the economy, is getting the pandemic under control, getting everyone vaccinated, getting people wearing masks and all that,” Federal Reserve Chair Jerome H. Powell said on Wednesday. “That’s the single most important economic growth policy that we can have.”