WASHINGTON, Sept. 30 (Xinhua) -- The U.S. economy contracted at an annual rate of 31.4 percent in the second quarter amid mounting COVID-19 fallout, 0.3 percentage point higher than the previous estimate in late August, the U.S. Commerce Department said in its third and final estimate released Wednesday.
The upward revision with the latest estimate primarily reflected an upward revision to personal consumption expenditures (PCE) that was partly offset by downward revisions to exports and to non-residential fixed investment, according to the department's Bureau of Economic Analysis.
The decrease in real gross domestic product (GDP) in the second quarter reflected decreases in PCE, exports, non-residential fixed investment, private inventory investment, residential fixed investment, and state and local government spending that were partly offset by an increase in federal government spending, the report showed.
The "advance" estimate of GDP released in late July showed that the U.S. economy contracted at an annual rate of 32.9 percent in the second quarter.
In the first quarter of 2020, U.S. real GDP shrank at an annual rate of 5 percent.
As businesses have reopened and millions of jobs have been regained, economists believe that the U.S. economy will rebound in the third quarter, while noting that more fiscal relief is needed to sustain the economic recovery.
"While the economy has been doing better than expected, I think there's downside risk to that if there is no further fiscal support," U.S. Federal Reserve Chairman Jerome Powell said recently at a hearing before the Senate Banking Committee.
The central bank chief noted both employment and overall economic activity remain well below their pre-pandemic levels, and the country still has 11 million unemployed, out of the 22 million who were laid off in March and April amid COVID-19 shutdowns.
The median projection for the unemployment rate is 7.6 percent at the end of this year, and 4 percent by the end of 2023, according to the Federal Reserve's latest economic projections. This is still above the historic low of 3.5 percent the country experienced before the COVID-19 pandemic.
Meanwhile, Democratic and Republican lawmakers remain deadlocked on the next round of relief roughly two months after the extra 600-U.S.-dollar per week federal unemployment benefits -- part of a 2-trillion-dollar relief package approved by Congress in late March -- expired at the end of July.
Amid growing doubts about the two sides' willingness and ability to break the impasse, U.S. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin resumed their talks earlier this week over a 2.2-trillion-dollar relief package newly proposed by House Democrats, which is a scaled-back version of a 3.4-trillion-dollar proposal the Democratic-held House passed in May.
With just over a month until Election Day, it's not clear whether the two parties could bridge their differences and reach an agreement on the relief package before the presidential election. Enditem
