The U.S. economy grew at a record 33.1% annual rate in the July-September quarter.
The Commerce Department’s estimate Thursday of third-quarter growth showed that the nation has regained only about two-thirds of the output that was lost early this year when the eruption of the virus closed businesses, threw tens of millions out of work and caused the deepest recession since the Great Depression.
The latest GDP reading is the last major economic report before Election Day, after a campaign that President Donald Trump has sought to build around his economic record before the pandemic hit. Trump has drawn generally solid public support for his handling of the economy.
On Thursday, the government also reported that the number of Americans seeking unemployment benefits fell slightly last week to 751,000. That was the fewest weekly applications since March.
The government’s estimate of the third-quarter jump in the gross domestic product — the total output of goods and services in the United States — was the biggest such increase on records dating to 1947. In the January-March quarter this year, GDP had contracted at a 5% annual rate before a record-setting 31.4% annual tumble in the spring.
The third quarter economic growth was powered by a record 40.7% annual increase in consumer spending. Americans began shopping again after the spring shutdown, which had sent consumer spending sinking by a record 31.4% annual rate. Consumer spending accounts for roughly two-thirds of economic activity.
Business investment rose a strong annual rate 20.3%, reflecting a 70.1% surge in investment in equipment. Residential investment surged at a a 59.3% rate, reflecting a solid rebound being enjoyed by home builders as demand for homes rises.
The government reports the quarterly GDP changes as annual rates. That means the change for any given quarter is calculated as if it had occurred for an entire year. Measured another way, GDP grew 7.4% from the April-June quarter to the July-September quarter, after tumbling 9% from the first quarter to the second and dropping 1.3% from last year’s fourth quarter to the first quarter this year.
Overhanging the economy now are growing uncertainty and worry as a resurgence of the virus raises the prospect of new lockdowns and threatens the economy, especially without more federal help. That fear has burst into the open this week across global financial markets. On Wednesday, U.S. stock averages tumbled roughly 3.5%, with the Dow Jones Industrial Average shedding 943 points.
A new wave of lockdowns and business closings has swept across France, Germany and elsewhere as surging viral infections on both sides of the Atlantic wipe out months of progress against the pandemic. In France, President Emmanuel Macron has declared a new nationwide lockdown starting Friday, saying the country has been “overpowered by a second wave.” In Germany, Chancellor Angela Merkel announced a four-week shutdown of bars, restaurants and theaters.
In the United States, where nearly every state is suffering from a rise in cases, Gov. Tony Evers of Wisconsin, one of the hardest-hit states, has pleaded with people to stay home. Gov. J.B. Pritzker of Illinois has banned indoor dining and drinking in Chicago and limited the size of gatherings in response to a surge in cases.
(AP)
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10 Responses
How can you post such a sickeningly biased article?? “The US has regained ONLY(??) about two-thirds of the output that was lost early this year.”
Are you kidding me? Which other country has rebounded so quickly?? If Biden was here we’d have 8 years of shovel ready jobs coming soon…
The Trumpkopf’s tweet proudly highlighting the 33% GDP growth for Q3 was really funny and in his own words, FAKE NEWS given that he failed to note that it followed a Q2 31.8% decline in GDP. Even after today’s numbers, we are still DOWN for the year in terms of pre-Covid growth rates. Also, this is a lagging indicator since the growth rates were already slowing in late August and September and the recent spikes in the West and Midwest may slow it further. The stock market and DOW are NOT a real measure of the economy. The only way to get back to “normal” is for people to feel “safe” in returning to work, shopping, school etc. and that won’t happen unless there is more widespread compliance with public health guidelines and a vaccine is widely available and used.
The stock market yesterday with over 900 decline in DJIA reminds us of October 1987, fear currently of the virus which is not being controlled and a new lockdown is imminent as in Europe. The economy cannot thrive if the virus is not controlled.
Gadolhadorah
The true Gedolei Hador, if you noticed, apreciate the Presidents hard nonstop work. The world is going on. Time to wake up from your slumber. Where do you live? Didnt you notice? I am sure it was very hard for ap to post this article. Even in their funny way.
Bunny: This Administration, which prides itself on “transparency” has consistently cherry-picked and misstated economic data regarding both GDP and GNP growth, along with other macroeconomic indicators. To hype a 33 percent growth rate in GDP as the “greatest in history” in the abstract without noting that it is simply a rebound from an equally large drop the prior quarter is statistical malpractice, albeit the new norm. Its the political equivalent of your local haberdashery store holding a big sale on Streimlach “50% off”, without mentioning that had just marked up the MSRP by 100 percent. Instead, they could have honestly focused on the key takeaway, which YOU did accurately note, that given the big drop in GDP experienced by the U.S. and all the other industrialized countries, the U.S. has been among the fastest recovering economies (although OECD and IMF data show several other countries with even higher recovery rates).
I’m sure Biden will figure out a way to fix that. You wouldn’t want to remove the reason for the government to expand its control.
Thank you gadolhadorah for the facts! Most trump supporters are satisfied just swallowing whatever this guy says.
Why didn’t he mention the stock market today? That’s his favorite statistic to talk about. All you have to do is look at the headlines, Boeing will layoff tens of thousands, airlines will layoff thousands, Disney will layoff thousands. The picture is not as rosy as it’s made to appear.
Unfortunatly, voting for biden is even less rosy. Much less rosy. Denying the problem with biden (really harris) is like denying the holocaust. Dont think even for a moment that people especially in germany made away all signs of the danger and actually laughed at it. I know for a fact otherwise. From people who were there. I would rather not write about it in a public forum.
Unfortunatly, voting for biden is even less rosy. Much less rosy. Denying the problem with biden (really harris) is like denying the holocaust. Dont think even for a moment that people especially in germany DID NOT MAKE AWAY all signs of the danger. SOME INCLUDING KLAL PEOPLE (not Rebbes or Rabbonim but so called askanim) actually laughed at it. I know this for a fact. From people who were there. I would rather not write about it in a public forum.
You Dems force our country into endless lockdowns & then blame Trump for an economic downturn! Well, now its rebounding DESPITE your idiotic blue states who’s governors are keeping businesses closed.
Unfortunately we have to count blue states in our Covid numbers & our economic numbers, without them we’d have the lowest covid death rate & the greatest economic recovery.