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Did US GDP make a full recovery from the COVID-19 recession by the end of the first quarter of 2021?

By EconoFact
NO

The Bureau of Economic Analysis reported an annualized rate of decline of real GDP (the value of goods and services accounting for price changes) of 31.4% in the second quarter of 2020, which represents what would happen over the course of a year if that decline persisted. However, change in GDP between just the first and second quarter was -9%. The quarterly change in GDP in the third quarter was a strong rebound of 7.5%, and the next two quarters saw real GDP grow by 1.1% and 1.6% (respectively). By the end of the first quarter in 2021 real GDP had still not fully recovered to pre-pandemic levels. While it may seem like 7.5% + 1.1% + 1.6% = 9.2%, which overcomes the effect of a -9% prior growth rate, this isn’t the case. To illustrate why, if you start with $100 and lose 50% of your money, you have $50. If you then make a 50% gain, you will have only $75.

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EconoFact is a non-partisan publication designed to bring key facts and incisive analysis to the national debate on economic and social policies. Launched in January 2017, it is written by leading academic economists from across the country who belong to the EconoFact Network. It is published by the Edward R. Murrow Center for a Digital World at The Fletcher School at Tufts University.
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