Economic data released on Thursday by the government revealed that during April, May and June, the US economy experienced the most severe shrinkage in its history. The details paint a worrying picture of the US’s chances of an imminent recovery.Gross domestic product (GDP), the broadest measure of the economy that records the price of goods and services produced in the country, shrank by an annual rate of 32.9%. The pace may well pick up in the months ahead but with Covid-19 cases increasing, it’s anyone’s guess how strong the recovery will be. Some 1.4m new unemployment insurance claims were filed just this week, suggesting that the number of people who were laid off is starting to rise again, meaning that any recovery may be slow to arrive.Here are four takeaways from Thursday’s GDP report.1. The Covid-19 recession is the worst the US has seen since GDP was first recordedThe US has been through many recessions in recent history, but none have been so bad as the one happening right now. During the Great Recession that started in 2008, the worst quarterly fall in annualized GDP – which measures how much GDP would change by the end of the year if

The US economy shrank by an annual rate of 32.9% between April and June, its sharpest contraction since the second world war, government figures revealed on Thursday, as more signs emerged of the coronavirus pandemic’s heavy toll on the country’s economy.The record-setting quarterly fall in economic growth compared to the same time last year came as another 1.43 million Americans filed for unemployment benefits last week, a second week of rises after a four-month decline.The annualized figure is the largest drop in quarterly gross domestic product (GDP) – the broadest measure of the economy – since records began in 1945. Economists expect the rate to improve sharply later this year but the outlook has been clouded by the recent rise in infections across the US.During the last financial crisis GDP shrank 8.4% in the worst quarter of 2008, according to Credit Suisse. The previous record came in 1958 when economic growth fell 10% during the Eisenhower recession.The fall came as large parts of the US economy shutdown in March in an attempt to halt the spread of the coronavirus across the US. The closures led to a historic number of layoffs and sent unemployment soaring to levels unseen since the

Royal Dutch Shell has reported a deep financial loss after a record writedown on the value of its oil and gas assets due to the collapse in global market prices triggered by coronavirus.The Anglo-Dutch oil giant revealed a net loss of $18.3bn (£14.1bn) for the second quarter 2020, down sharply from a net profit of $3bn over the same period last year and $2.7bn in the first three months of 2020.But the company was rescued from what was expected to be its worst set of quarterly financial results on record by its oil trading business, which helped shore up the company’s income as oil market prices plunged to 21-year lows.Shell reported an adjusted net income of $638m in the second quarter, down 82% from the same period a year earlier, after analysts predicted a $664m loss.Ben van Beurden, Shell’s chief executive, said the company had delivered “resilient” cash flows in “a remarkably challenging environment”.The company was still forced to make a record downgrade to the value of its oil and gas assets through a post-tax impairment charge of $16.8bn after revising down its forecasts for global oil prices in the wake of the Covid-19 pandemic.The writedown includes the group’s stake

British negotiators in the trade and security talks with the EU have only started to engage with the most contentious issues “in the last week or two” after pressure from business groups, the European commissioner for trade has said.In an interview with the Guardian, Phil Hogan, who oversees the EU’s negotiations, said there had been “a change of attitude” by Downing Street in July as they realised time was running out but that the talks were “not as advanced as we would like”.The two sides have been engaged in intensive negotiations this month, and informal discussions have continued this week. But despite the most contentious issues of access to British waters for European fishing fleets and new rules to prevent regulatory undercutting being under discussion, common ground between the sides is yet to be found with about 12 weeks left before parliamentary ratification will need to be sought.Hogan, a former Irish government minister, pointed to “five or six” major issues standing in the way of a deal, with the one of the most pressing being what self-limiting rules the UK government would establish on its financial assistance to companies, known as state aid.No 10 had so far refused to to

Top executives from US tech giants appear before House judiciary committee over their companies’ massive wealth and power – follow live Billionaire bosses to feel the heat from Congress US sees deadliest day of coronavirus summer – live LIVE Updated Play Video Zuckerberg and Bezos among tech CEOs to testify in historic antitrust hearing – watch live Key events Show 12.03pm EDT12:03 Congress to grill top tech executives Live feed Show 12.03pm EDT12:03 Congress to grill top tech executives Hello, Kari Paul here, ready to guide you through today’s landmark antitrust hearing, in

Tourist hotspots across the UK are bearing the brunt of the ailing jobs market, an analysis of data on unemployment benefit claims since the Covid-19 lockdown has shown.Figures from Labour show that in areas heavily reliant on tourism the rise in the number of people seeking unemployment benefits in recent months is an average of 65 percentage points higher than in other areas. The data has prompted Keir Starmer to warn that holiday towns are facing a jobs crisis.Labour analysed data from the Office for National Statistics showing that in 32 places in England, Wales and Scotland where one fifth or more of the local workforce are in tourism-related jobs, the unemployment benefits claimant count among working-age adults has risen by an average of 174% from February to June – compared to 109% for the UK as a whole.The Labour leader will visit Falmouth, Cornwall, on Wednesday, where 24% of workers are in tourism related jobs and the unemployment claimant count has risen by 140% since lockdown. As the government winds down its furlough scheme, Starmer is calling for more targeted, flexible support to protect jobs in communities reliant on tourism.Other areas highlighted in the analysis include Portree, on the

The number of people claiming unemployment benefits per job vacancy in Britain has increased fivefold since the onset of the coronavirus pandemic, according to an employment thinktank.The Institute for Employment Studies (IES) said approximately eight people are claiming benefits support for every job opening, up from 1.5 people per job before the crisis began in March.The number of job vacancies in Britain has plunged by almost half a million since January to 333,000 in June, hitting the lowest levels since comparable records began in 2001. With companies making redundancies, putting hiring plans on hold or furloughing their workers, the numbers of people claiming unemployment-related benefits has climbed by 112% since March to reach more than 2.6 million – resulting in an average of 7.8 benefit claimants per vacancy.The IES has published its analysis as competition among job hunters becomes increasingly intense, with businesses receiving hundreds of CVs for the relatively few openings they have on offer.Mitchells & Butlers, Britain’s biggest pub chain with about 1,700 pubs and restaurants, told the Guardian it had recorded a fourfold rise in applications for front of house jobs on average. One of its All Bar One venues, in Liverpool, has received more than 500

In the 1970s British households held wealth worth around three times the nation’s GDP. Today it’s more than seven times, the highest such ratio in over a century. People in the top 10% of society have £2.5m, on average, in wealth. The bottom 10% have virtually nothing. The gap cannot currently be made up by saving. As in the novels of Jane Austen, social mobility appears dependent on the wealth you inherit or marry in to, rather than how much you can set aside from wages.Just how significant this trend has become was highlighted by the Institute for Fiscal Studies, which last week said as many as one in 10 UK adults born in the 1980s will inherit more than half as much money from their parents as the average person earns in a lifetime. Those born 20 years earlier in the top decile had received less than a third of average lifetime earnings.The gap is down to the rising value of assets, such as homes and shares, which have outpaced stagnant incomes. The wealthier have more assets and can make more gains on their capital. They do not consume these sums but bank them, widening the chasm between the

The last week has been my most human for four months. I have been to a hairdresser; eaten out in restaurants and at friends’ homes; played tennis and golf; stood in the street talking with work colleagues; and, what seemed most novel of all, shared a beer in a pub. It all feels rather heady.But none of it was normal. Everybody wore masks at the hairdresser; the restaurants were deserted; windows and doors were wide open at my friends; we had the inside of the pub to ourselves. Meanwhile, Zooming continues unabated; public transport still seems a risk of last resort; and, in the supermarket on Friday, I wore a mask like everyone else – and thought this right and unremarkable. Go into our city centres and they are eerily quiet. What is human and how we interact are being redefined.For good reason. While the Covid infection rate has been declining since mid-May and is now running at one in every 2,000, the rate of decline has levelled off. Yes, try to escape the privations of intense lockdown, but only within limits, and be keenly aware that Covid could come back.The new normal is beginning to be felt. Companies are

Sebastian Haffner, who was a distinguished correspondent for the Observer after the second world war, was in Berlin during the 1930s before escaping to Britain, and witnessed with horror the rise of Hitler and the assault on treasured public institutions.After Haffner’s death, his son Oliver – with whom I was at school – discovered a manuscript written by his father of what it was like to see the decay of civilised standards. It became a bestseller in Germany, and Oliver translated it into English. The book was published here under the title Defying Hitler – catchy but somewhat misleading, because, of course, most didn’t defy Hitler.Now, despite what has become my intense dislike for the way Johnson, Cummings, Gove and their fellow Brexiters are steering the nation, I should not for one moment compare them with the Nazis. That would be absurd. Nevertheless, their assault on our institutions, not least parliament and the civil service, is deeply disturbing, and does raise concerns about where it might lead.In the sphere of economic policy, it was interesting that Robert Chote, the much-respected retiring chairman of the Office for Budget Responsibility (OBR), sounded a warning note at the conclusion of his recent oral