The American economy roared back to life between July and September, defying government-imposed lockdowns to post a record 33.1 percent increase from the previous quarter. That’s according to the latest data from the U.S. Bureau of Economic Analysis (BEA), which issued its “advance estimate” of third quarter gross domestic product on Thursday morning.
A second estimate with more complete data will be released on November 25, 2020.
For now, though, this marks the biggest annualized economic increase in American history.
Even better news? The bulk of the economic expansion was driven by growth in personal consumer expenditures – which climbed 25.27 percent after contracting 24.01 percent in the previous quarter as the worst of the coronavirus recession ravaged the nation.
“The increase in third quarter GDP reflected continued efforts to reopen businesses and resume activities that were postponed or restricted due to COVID-19,” a release from the agency noted.
During the second quarter, economic growth contracted by a revised 31.4 percent – the worst quarter in American history. The first quarter of the year saw a five percent contraction as the coronavirus lockdowns began sweeping across the nation in mid-March.
And while the U.S. economy is showing a 2.9 percent contraction year-over-year, that number is borderline miraculous considering the carnage we were looking at back in the spring.
Needless to say, this buoyant economic data could be a boon for U.S. president Donald Trump – who goes up against former vice president Joe Biden, the 2020 Democratic presidential nominee, in next Tuesday’s quadrennial presidential election.
“One can be certain that Trump will parade with this ‘blockbuster’ number for the next four days,” our friends at Zero Hedge noted.
Trump backers were already breathlessly touting the data, with Robert Romano of The Daily Torch noting that the third quarter bounce back “blew the barn doors off all other past recoveries.”
“Great again,” Romano’s headline blared – referencing Trump’s signature #MAGA campaign slogan.
“The American people can clearly see the benefits of safely reopening,” Romano added. “And in just a few short days, we’ll find out if they want to keep on reopening with Trump, or shut it back down with Biden.”
Not everyone was sold on that assessment, though.
“The growth from Q3 to Q2 reflects the depth of the Q2 hole as much as it reflects the size of the Q3 recovery,” noted Justin Wolfers, who dedicated a lengthy Twitter thread to pouring cold water on the data. “We already knew Q2 was horrible, and we all know Q3 was better. Tons of indicators have told us this.”
According to Wolfers, sustained unemployment remains a concern – as does a recent spike in coronavirus cases.
“If you really want to see where the economy is going, the indicator that Wall Street economists are tracking most closely is the progress of the virus,” he tweeted. “It’s impossible to have a healthy economy without a healthy population. The economy won’t re-open if people don’t feel safe.”
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