US Real GDP Growth and Impact of Covid-19

Abstract

The global pandemic, COVID-19, has exacerbated the Gross Domestic Product (GDP) growth of the global economy since its outbreak in December 2019. One of the most affected economies, due to the global pandemic, is the US economy, currently crippled by an increased number of COVID-19 related deaths, layoffs, reduced work hours, and other related natural disasters, such as winter storms. Hence, it is imperative that the damage done to the GDP growth is evaluated meticulously to craft favorable monetary and fiscal policies to uplift economic performance. One of the key yet debated methods used by many economists is utilizing real GDP per capita as an economic performance measurement tool. Using two economic datasets and a multiple regression model, we compared real GDP per capita performance in the US economy between the second and third quarters of 2020. The study finds that the impact seems detrimental due to restrictions imposed on economic activities, such as business closures, disturbances in the supply chain, employee layoffs and reduced work hours. However, in the third quarter of 2020 COVID-19 after some of the COVID-19 imposed restrictions were lifted, the real GDP per capita significantly increased.