The U.S. economy grew by a record 7.4 percent in the quarter ending in September, although it has recovered only two-thirds of the ground lost in the first half of the year due to the coronavirus pandemic. Data released this morning by the Bureau of Economic Analysis showed that at an annual rate, gross domestic product (GDP) grew by 33.1 percent from July through September, although this quarter’s growth is not expected to continue for an entire year.
The third-quarter report marks the fastest pace of annualized growth on record, but it followed the worst drop on record in the second quarter (31 percent decline) and economists are generally not optimistic about this fourth quarter. The combination of a spike in COVID-19 cases this month in the Midwest and West and the absence of any additional federal stimulus spending sent markets tumbling this week.
The White House cheered the report, hoping it buoys President Donald Trump’s re-election chances next week.
“GDP number just announced,” Trump tweeted today. “Biggest and Best in the History of our Country, and not even close…So glad this great GDP number came out before November 3.”
Democrats countered that more than 23 million Americans are still on some form of unemployment assistance and millions of American households, small businesses and industries are falling further behind. Democratic presidential nominee Former Vice President Joe Biden said the Trump administration has consistently minimized the COVID-19 threat and has been unwilling to take the steps necessary to control the virus, which is key to stabilizing the economy.
“This report underscores three inescapable truths about Donald Trump’s economy: we are in a deep hole and President Trump’s failure to act has meant that Q3 growth wasn’t nearly enough to get us out of; the recovery is slowing if not stalling; and the recovery that is happening is helping those at the top, but leaving tens of millions of working families and small businesses behind,” Biden said in a statement.
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