The coronavirus pandemic led to the largest GDP plunge in American history, the Commerce Department said on Thursday, citing preliminary data.

US gross domestic product fell at a record 33% annualized rate in the second quarter, meaning the economy was about 10% smaller after those three months than at the start of the year.

Morgan Stanley researchers predict that one record will be immediately followed by another, saying in a research note that third-quarter GDP is poised to show the largest sequential increase on record.

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Foto: Image via Morgan Stanley Research. Source: Bureau of Economic Analysis, Morgan Stanley Research

The second quarter’s drastic drop-off can be attributed to months of pandemic-related shutdowns. March and April saw mass layoffs and completely decimated economic activity. But as lockdowns lifted in May and June – even as coronavirus cases continue to surge – economic activity spiked again.

A note from Bank of America said July should continue to see jobs growth, predicting about 1 million jobs will be added on net after June’s record 4.8 million increase. Real-time data sources from the Bureau of Labor Statistics and Google mobility trends indicate slowing momentum due to the emergence of new virus hotspots, the bank said.

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Foto: Image via BofA Global Research, sources also include BLS and Google. Source: Bureau of Labor Statistics, Google, BofA Global Research

Bank of America also cautioned there was a “large error band around this forecast” and said it sees the unemployment rate heading from about 11.1% as of end-June to to 10.7%.