The Department of Commerce announced Oct. 29 that U.S. economic output in the third quarter grew by 33.1 percent, the largest expansion on record, after falling by 31.4 percent in the second quarter, the largest shrinkage on record.
In a release detailing the agency’s “advance” estimate for third-quarter gross domestic product (GDP), the Commerce Department noted, as is standard practice, that the number is subject to a follow-up revision, to be published on Nov. 25.
The Commerce Department said the record rebound reflects the reopening of the economy and resumption of business activity following lockdowns spurred by the outbreak of the CCP (Chinese Communist Party) virus.
“The increase in third-quarter GDP reflected continued efforts to reopen businesses and resume activities that were postponed or restricted due to COVID-19,” the department stated.
Tim Murtaugh, communications director for the campaign to reelect President Donald Trump, said in a statement that the record economic rebound is a “validation of President Trump’s policies which create jobs and opportunities for Americans in every corner of the country.”
Murtaugh highlighted the Trump administration’s policy of “cutting taxes and reducing regulations and red tape,” which he said “clear the way for American ingenuity and our entrepreneurial spirit to thrive.”
Still, while the economy recovered a large portion of outbreak-related losses, it remains below pre-pandemic levels.
“The rebound in Q3 GDP must be viewed in the context of the expectation that the full year will likely still see a contraction, once the final figures are in,” Bankrate.com senior economic analyst Mark Hamrick said in a statement to The Epoch Times.
Market analyst Sven Henrich noted in a tweet: “33.1 [percent] GDP. Congrats. 45.7 [percent] was needed to break even,” adding in a separate message, “Still 3/4 of a million claims.”
Henrich was referring to a separate report from the Labor Department on Oct. 29 (pdf) that showed 751,000 people filed for state unemployment benefits in the week ending Oct. 24, a drop of 40,000 from the previous week and the lowest since the pandemic delivered its colossal blow to the economy beginning in March.
Weekly jobless claims hit a record 6.867 million in March and, aside from several upticks, have fallen ever since. Still, they remain above their 665,000 peak seen during the 2007–09 Great Recession. Also, just over half of the 22.2 million jobs lost during the pandemic have been recouped.
“New unemployment claims are lower, but hardly in the realm where we can take a great deal of reassurance from the present situation or near-term outlook. There are still some 22.6 million individuals receiving some form of unemployment compensation in the latest week, enough to fill a major American city,” Hamrick told The Epoch Times.
The Commerce Department’s GDP report also noted that disposable personal income fell by $636.7 billion, or 13.2 percent, in the third quarter, after surging by $1.6 trillion, or 44.3 percent in the second quarter, driven by historic levels of federal stimulus. At the same time, personal savings fell to $2.78 trillion in the third quarter from $4.71 trillion in the preceding quarter.
Both figures suggest a drag on consumer spending, which is a major driver of the economy.
“There’s a high level of uncertainty associated with growth in the current quarter, including the risk that consumers opt to spend more time in their homes, and less money out and about, in the coming weeks to avoid the virus. Growth remains lower than where it ended 2019, which means it isn’t yet time to hang the mission accomplished banner,” Hamrick said.
In the campaign statement, Murtaugh cast the election as a choice between “a Trump boom versus a Biden depression.”
Trump, in an Oct. 29 video message, said, “The really big factor in this election is the fact that Joe Biden and Kamala want to raise your taxes and raise them like nobody’s ever been raised before,” adding that what is estimated to be around a $4 trillion tax hike over 10 years would “drive our country into depression.”