Breaking: US economic activity nosedives in Q2, real GDP contracts by 32.9%

The United States' Real Gross Domestic Product (GDP) contracted at an annual rate of 32.9% in the second quarter, the US Bureau of Economic Analysis' advance estimate showed on Thursday. This reading came in slightly better than the market expectation for a decline of 34.1%.

Follow our live coverage of the US GDP report and the market reaction.

Market reaction

The initial reaction of the US Dollar Index (DXY) to the data was largely muted. As of writing, the DXY was up 0.33% on the day at 93.56.

Key takeaways from the press release

"The decline in second-quarter GDP reflected the response to COVID-19, as "stay-at-home" orders issued in March and April were partially lifted in some areas of the country in May and June, and government pandemic assistance payments were distributed to households and businesses." 

"The decrease in real GDP reflected decreases in personal consumption expenditures (PCE), exports, private inventory investment, nonresidential fixed investment, residential fixed investment, and state and local government spending that were partly offset by an increase in federal government spending."

"Imports, which are a subtraction in the calculation of GDP, decreased."

"Current‑dollar GDP decreased 34.3%, or $2.15 trillion, in the second quarter to a level of $19.41 trillion. In the first quarter, GDP decreased 3.4%, or $186.3 billion"