U.S. GDP grew at 33.1% annualized rate in third quarter, feds report
The GDP has now recovered about 2/3rds of what was initially lost in the coronavirus-induced recession
In the third quarter, the GDP grew at an annualized rate of 33.1%, according to a new report from the U.S. Department of Commerce released Thursday morning.
Economists expected approximately 32% GDP growth, making up ground lost during a sharp 31.4% contraction that occurred during the second quarter, following the initial pandemic-induced economic shutdown. The 33.1% annualized expansion pace was slightly higher than the widely predicted figure of 32%.
Mark Zandi, the chief economist at Moody's Analytics, told CNBC that he thinks "most of that growth came at the end of the second quarter, coming into the third quarter. May, June, July were very strong months. That’s when businesses were reopening,” he said. “August was okay, September kind of went flat into October. I think the economy is moving very sideways.”
Economists are looking to the fourth quarter with some anxiety, wondering if a second wave of coronavirus infections could lead to a materially worse November and December. An increased spread rate and reinforced shutdown policies could encourage consumers to refrain from shopping and visiting restaurants, all while Congress and the White House have failed to deliver a new coronavirus relief package and likely won't until at least the beginning of the new year.
Another significant factor in the positive third quarter GDP numbers was strong consumer spending in late spring and early summer months. Consumption habits were aided by the enhanced unemployment given to workers through the end of July, when it ran out. Economists believe the repackaging of enhanced unemployment that took place in August, combined with no congressional stimulus package, and a possible flare up of coronavirus numbers, could negatively impact fourth quarter spending habits.
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