New York was among the states with the biggest drop in economic activity in the April-June period as businesses shut down to slow the spread of the coronavirus, according to data released Friday.
The federal Bureau of Economic Analysis reported New York’s gross domestic product fell 36.3% in the second quarter compared with the first quarter of 2020. GDP is the sum of all goods and services produced in an area for an entire year.
The bureau said the projected size of New York’s economy is now $1.6 trillion based on GDP for April-June, down from $1.8 trillion based on January-March GDP. The state lost $47.6 billion in business activity during the second quarter.
New York was hit especially hard by COVID-19 “and imposed stringent restrictions to contain the virus, which translated into weak second-quarter GDP results,” said John Rizzo, chief economist for the Long Island Association business group and a Stony Brook University professor. “But [the restrictions] also permitted the gradual reopening of the state economy while greatly diminishing the viral spread.”
He and others predicted improved GDP data for the July-September period.
Conservative fiscal expert E.J. McMahon, founder of the Empire Center for Public Policy, an Albany think tank, said New York’s GDP “crashed” in April-June with “easily the biggest drop” since the bureau began releasing quarterly GDP for the states in 2015. “New York’s economic performance ranked 44th out of 50 states,” he said on Friday.
New York’s economy contracted more than the U.S. economy, with national GDP falling 31.4% in April-June period compared with January-March.
The bureau said every state and the District of Columbia saw less business activity in April-June. The hardest hit were Hawaii and Nevada, each with GDP down 42.2%. Washington, D.C., with its GDP down 20.4%, fared the best.
Robert Mujica, Gov. Andrew M. Cuomo’s budget director, said the GDP figures “should be a wake-up call” to the federal government.
“We now have to overcome the pandemic’s fallout, and as we’ve said very clearly, the federal government needs to take responsibility and deliver the funding New York State needs to revive its economy,” he said.
Mujica noted that Friday’s bureau report shows New York produces 8% of national GDP.
Statewide, the drop in economic activity was greatest in four sectors: hotels and restaurants, health care and social services, arts and recreation, and professional and technical services, with each contracting more than 3%.
The bureau also said New York’s economy grew 1.6% last year while the U.S. economy grew 2.2%. Both economies expanded 3% in 2018.
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NYS’ ECONOMIC CONTRACTION
The state’s Gross Domestic Product fell 36.3% in the April-June period compared with January-March. Here are the five economic sectors that shrank the most:
Hotels and restaurants: -5.97%
Health care and social services: -4.54%
Arts, entertainment and recreation: -3.73%
Professional, scientific and technical services: -3.25%
Retail trade: -2.67%
SOURCE: U.S. Bureau of Economic Analysis