The US economic system staged a record-setting rebound from the coronavirus disaster within the third quarter, the feds stated Thursday — however there’s nonetheless a protracted technique to go earlier than the nation makes a full restoration.
America’s gross home product — the worth of all items and providers produced right here — grew by roughly 7.four p.c from July to September as customers and companies emerged from the pandemic-related lockdowns that led to a 9 p.c contraction within the second quarter.
That development equates to an annual fee of 33.1 p.c, by far the biggest since fashionable record-keeping started in 1947 and practically twice the earlier document surge of 16.7 p.c within the first quarter of 1950, the US Commerce Division knowledge present. Economists had been anticipating an annualized 31.9 p.c soar after the second quarter’s 31.four p.c plunge.
However the restoration is just not full — final quarter’s GDP of $21.1 trillion was nonetheless about 2.7 p.c under the $21.7 trillion recorded within the fourth quarter of final yr, earlier than COVID-19 sparked the worst financial downturn for the reason that Nice Melancholy.
“A document surge in third-quarter GDP will seemingly mark the start of the restoration, after a recession which abruptly began within the fourth quarter of final yr and sure ended within the second quarter,” stated Yelena Shulyatyeva, senior US economist at Bloomberg Economics. “But the dimensions and unprecedented nature of the COVID-19 downturn will go away lingering scars through the restoration.”
The trail to a full rebound seems rocky — one other nationwide surge in coronavirus infections and hospitalizations has raised fears that the lockdowns might return in components of the US as they’ve in France and Germany.
Furthermore, the stimulus measures that put money in People’ pockets and helped shore up shopper spending have run dry with no new settlement in sight for a brand new spending bundle from Washington. Greater than 12 million employees stay unemployed, and layoffs have mounted in latest months as giant firms grapple with the lasting impression of the virus.
The Federal Reserve, which has pushed Congress to move one other stimulus invoice, expects GDP to shrink by 3.7 p.c this yr following development of two.Three p.c in 2019.