The American economy grew by 33.1 percent for the July-September quarter this year. This is the largest quarterly gain in history since records started being maintained in 1947. The previous highest quarterly growth rate was 16.7 percent recorded in 1950.
The 33.1 percent growth matches the advanced Q3 estimate published by the Department of Commerce a month back. “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 had said.
Even though the economy achieved a 33.1 percent growth rate, there is still work to be done with regard to a full economic recovery. This is because the GDP had fallen by 31.4 percent in the second quarter of the year after a decline of 5 percent in the first quarter. As such, the American economy continues to be in the red.
The jobless benefits program is set to expire in December, at which time over 9 million people will lose unemployment benefits. Jobless claims have risen two weeks in a row. Consumer sentiment also declined to 96.1, well below the pre-coronavirus level of 132.6. Even though imports reached the highest level in over a year, America’s trade deficit has been rising in the past months.
Personal incomes have fallen. However, household spending went up by 0.5 percent in October. This opposite movement of income and spending is an indication that Americans are drawing on their savings to maintain their lifestyle during the pandemic.
But as market analyst Sven Henrich noted in a tweet in October, a 33.1 percent growth means that the U.S. has reached almost three-fourths of the 45.7 percent needed to break even the economy. If authorities succeed in keeping coronavirus cases in check over the coming months, we should see an uptick in business activity and consumer spending, which will definitely give legs to the economic recovery.