Another reason for the smaller contraction was, as noted earlier, that fiscal transfers did a lot to replace lost income. This has helped sustain employment through periods of lockdown. It has also supported household consumption, which has recovered sooner than expected. A similar pattern has been evident in other advanced economies.
Second, while the part of the contraction directly attributable to initial health measures turned out to be smaller, general uncertainty and responses to weak demand seem to have accounted for more of the downturn in output and the labour market than earlier envisaged.