Commerce Department says Q1 GDP contraction was 5%, worse than initially thought

The Commerce Department on Thursday revised the total gross domestic product contraction in the first quarter of 2020 upward to 5%, a higher number than earlier projections as the agency took full stock of the economic effects of the ongoing coronavirus lockdowns. 

In a news release on the Commerce website, the Bureau of Economic Analysis said that real gross domestic product "decreased at an annual rate of 5.0 percent in the first quarter of 2020."

That number, which is higher than an earlier estimate of 4.8 percent, is "based on more complete source data" than were available for the earlier estimate. 

The agency explicitly draws a line from the COVID-19 shutdowns that began in mid-March and the high decrease it announced today. 

"The decline in first quarter GDP reflected the response to the spread of COVID-19, as governments issued 'stay-at-home' orders in March," the release states. "This led to rapid changes in demand, as businesses and schools switched to remote work or canceled operations, and consumers canceled, restricted, or redirected their spending."

The agency also said that current-dollar GDP "decreased 3.5 percent, or $191.6 billion, in the first quarter to a level of $21.54 trillion." That estimate did not change from earlier projections.