April 29 (UPI) -- After a full decade of steady and record growth, the U.S. economy abruptly shrank by almost 5 percent during the first three months of 2020 -- due almost entirely to the coronavirus crisis, the Commerce Department said in its quarterly report Wednesday.
The department said the U.S. gross domestic product contracted by 4.8 percent for the first quarter, the first contraction since 2014 and the largest since the Great Recession.
The figures show the domestic economy grew over the first two and a half months of the year before coronavirus-related closures brought it to a sudden halt in mid-March.
The contraction is the largest since an 8.4 percent drop in the final quarter of 2008. The U.S. economy grew by 2.1 percent in the previous quarter, Q4 of 2019.
"The decrease in real GDP in the first quarter reflected negative contributions ... that were partly offset by positive contributions," the report said.
The department acknowledged that the global health crisis led to rapid declines in demand and affected a wide swath of the economy -- and cautioned that the second quarter, April through June, will probably show greater losses.
"The full economic effects of the COVID-19 pandemic cannot be quantified in the GDP estimate for the first quarter of 2020 because the impacts are generally embedded in source data and cannot be separately identified," the department said.
On Wednesday, the Federal Reserve announced it would keep the federal interest rate at zero to 0.25 percent while committing to using its "full range of tools" to support the economy amid the pandemic.
"The forceful measures that we as a country are taking to control the spread of the virus have brought much of the economy to an abrupt halt," said Federal Reserve Chairman Jerome Powell. "Many businesses have closed, people have been asked to stay home and basic social interactions are greatly curtailed. People are putting their livelihoods on hold, at significant economic and personal cost."
The coronavirus curve seems to be flattening in the United States and many states are beginning to lift the restrictions, but most analysts say it will be many months before the U.S. economy could return to a period of sustained growth. More than 26 million Americans have filed for unemployment over the last five weeks.