NOVEMBER 2, 2020 – RECORD HIGH Q3 GDP REPORTED
After its worst quarter ever, US GDP rebounded in Q3 at an annualized rate of 33.1 percent. For comparison, second quarter 2020 GDP fell 31.4 percent. This should be a time to cheer, but with coronavirus infections hitting record levels worldwide, how the fourth quarter of this year will unfold is uncertain.
Stimulus programs that helped encourage the economy are ending, and half the 22 million jobs lost in March and April have yet to return with the unemployment rate at 7.9 percent, double the pre-pandemic levels. Third quarter growth was pushed by a return to consumer activity, which accounts for 68 percent of GDP, as people started shopping and restaurants and bars reopened. Personal consumption was up 41 percent and gross private domestic investment rose 83 percent.
Total growth for 2020 remains below the 3.5 percent experienced at the end of 2019, with economists predicting Q4 2020 will rise 4 percent, depending on the effect of a rising infection rate.