America’s economy just had its worst quarter since 2008

America’s first-quarter GDP, the most expansive measure of the US economy, fell at a 4.8% annualized rate, the US Bureau of Economic Analysis reported on Wednesday.

It was the first contraction of the US economy since the first quarter of 2014, and the worst drop since the fourth quarter of 2008.

Consumer spending, the largest contributor to US GDP, declined at a 7.6% annualized rate, as people were ordered to stay at home. Lat quarter marked the deepest decline in US consumer spending since the second quarter of 1980.

Much of America’s GDP decline was driven by lower-than-usual healthcare spending, as people delayed elective procedures.

The awful first-quarter report was alarming, considering the US economy was humming along in January and February until it came to a screeching halt in mid-March, when businesses shut and stay-at-home orders were put in place across the country. That was enough to offset the economic activity in January and February. The decline was worse than economists had predicted: The Refinitiv consensus forecast was -4%.

The BEA cautioned that “the full economic effects of the Covid-19 pandemic cannot be quantified in the GDP estimate” because the impact of the outbreak cannot be stripped out of that data.

Ahead of the report, economists warned that this was only an advance reading of GDP growth that could be revised down as more data from the quarter trickles in.

Even so, the message is clear: six years of straight quarterly growth are over.

“The economy has fallen off the cliff and broken its neck with the only thing consumers are buying are nondurable goods like food and beverages for ‘off-premises consumption,'” said MUFG chief financial economist Chris Rupkey.

In the current quarter, the economy is expected to contract even further. Even though some states are beginning to reopen, experts believe it will be some time until activity levels are back to what they were before the outbreak.