Daily Management Review

Record Growth US Economy In Third Quarter


Record Growth US Economy In Third Quarter
With consumer spending being fuelled by the more than $3 trillion in federal pandemic relief spending, the United States economy saw a record growth in the third quarter. However experts warned that it would take about a year for the deep scars created by the novel coronavirus pandemic on the economy to heal completely.
According to its advance estimate issued by the US Commerce Department on Thursday, in the latest completed quarter, there was a 33.1 per cent bounce back in the gross domestic product at an annualized rate in the American economy. This rate of growth was the fastest that the economy experienced since the government started keeping records in 1847. In the previous second quarter, the US economy had shrunk by a historic rate of 31.4 per cent.
According to analysts and experts, the human tragedy caused by the novel coronavirus pandemic which has left tens of millions Americans still unemployed and more than 222,000 dead, will not be mitigated by the latest GDP report – among the last few major economic scorecards to be revealed before the November 3 presidential elections in the country.  
It is likely that the historic growth in GDP will be touted by US president Donald Trump, who is seeking a re-election and is trailing in most national opinion polls, as a signal of recovery of the economy. 
However the output of the US economy was still well below the level in the fourth quarter of last year. This is one fact that would be highlighted by Trump’s Democratic challenger Joe Biden along with the claim that the signs of the growth spurt is fast petering out.
The US economy had slipped into recession in February.
A lifeline for many businesses and the unemployed was provided by the government’s rescue package along with providing opportunity for consumer spending which as the major driver of the GDP growth. But with no deal in sight for another round of relief, there has been depletion in government funding. And with a resurgence of ne Covid-19 cases spreading across the US, restrictions on businesses like restaurants and bars are being imposed to prevent the further spread of the virus.
Only about half of the 22.2 million jobs that were lost during the pandemic have recovered but there is still layoffs happening.
In a separate report, the US Labor Department announced filing for state unemployment benefits by about 751,000 people in the week ending October 24. In comparison, that number was at 791,000 in the previous week. Even though unemployment claims have come down in the country from the record of 6.867 million in March, the unemployment claims still are above their 665,000 peak that as witnessed seen during the 2007-09 Great Recession.