Revision shows second quarter GDP shrank at annualized 31.7 percent rate

The economy shrank at an annualized rate of 31.7 percent in the second quarter, according to the second estimate from the Commerce Department, 1.2 points better than the initial 32.9 percent estimate.

The revised number remains the worst quarterly contraction on record, reflecting the sudden shutdown of the economy as the novel coronavirus pandemic led to widespread closures, lockdowns and health precautions that kept people home.

The updated estimate, which includes more complete data, also found that wages in the first quarter had grown less than earlier estimated. Wages and salaries grew $103.6 billion that quarter, down $3.4 billion from earlier estimates.

The pandemic took hold in the last weeks of the first quarter, which saw a 5 percent decline in annualized gross domestic product.

Economists expect a significant bounce in the third quarter as the economy crawls out of the deep hole caused by the pandemic.

But even with a blockbuster reading expected in the third quarter, which will be announced just days before November’s elections, the economy is not expected to return to its pre-COVID level for several years.