The United States economy grew at its fastest pace ever in the third quarter after the worst quarter in history. It is because a nation battered by an unprecedented pandemic began to put itself back together.
Third-quarter gross domestic product measures the total goods and services produced in the July-to-September period. Thus, it expanded at an annualized pace of 33.1%. That is what, on Thursday, the Commerce Department reported in its initial estimate for the period.
In the second quarter, that came after a 31.4% plunge. It was better than the 32% estimate from economists surveyed by Dow Jones. The previous post-WWII (World War II) record was in the first quarter of 1950, and the indicator was 16.7% burst.
Markets reacted positively to the news. Now, Wall Street is looking at a flat to a slightly positive open.
Increased consumption, along with substantial gains in residential investment and business as well as exports, fueled the third-quarter rebound. Following the expiration of the CARES Act, decreases in government spending rescue subtracted from GDP.
Governments across the country shut down large amounts of activity. It is to stem the spread of Covid-19. After that came the robust growth pace. The WHO (World Health Organization) declared Covid-19 as a pandemic on March 11.
United States
After that, around 228,000 American lives lost to the virus. Moreover, it infected approximately nine million. Since February, the economy has been in a technical recession. It is because first-quarter growth declined at a five percent pace.
Thus, the news in the third quarter was good. Nevertheless, the United States faces a more challenging road ahead. It is because worries grow over the economy, and the health impacts and coronavirus cases increase. Around half of the 22 million jobs lost in March and April remain unfilled. The unemployment rate is at 7.9%. It is more than double comparing to its pre-pandemic level. All in all, 12.6 million Americans are still out of work.
The gross domestic product release comes five days before Election day. Thus, it culminates heated debate between former Vice President Joe Biden and the United States President Donald Trump. Before the pandemic, Trump promised a return to healthy growth. Meanwhile, Biden accused the Republican of taking a thriving economy into a ditch because of the mismanagement of the COVID-19.
James McCann works for Abrdeen Standard Investments. He is a senior global economist there. So, McCann said that gross domestic product numbers are demonstrating that the United States economy did rebound strongly.
