The Great American Recovery: Third Quarter GDP Blows Past Expectations

american GDP recovery expectationsAfter releasing his plan to reopen America safely in April, President Trump remarked that prior to the Coronavirus pandemic, the United States had “built the greatest economy anywhere in the world . . .  and we’re going to build it again.”

At that time, the consensus among economic forecasters was that pandemic-induced lockdowns would result in a sharp economic contraction in the second quarter, and that the economy would experience tepid growth in the third quarter as it slowly clawed back pandemic losses. But because of the President’s pro-growth policies that set a strong pre-pandemic foundation—and the extraordinary speed and scale of the Administration’s support for America’s families and businesses—our nation’s recovery continues to exceed expectations.

This morning’s release of U.S. GDP for the third quarter of 2020 from the Bureau of Economic Analysis (BEA) affirms President Trump’s statement that “we’re coming back, and we’re coming back strong.”

The BEA estimates that real GDP grew 7.4 percent (33.1 percent at an annual rate) in the third quarter, the largest single quarter of economic growth on record and roughly twice the prior record of 3.9 percent (16.7 percent at an annual rate) set in the first quarter of 1950. This growth follows the most severe pandemic-induced contraction on record in the second quarter of 2020, which occurred as the government mandatorily shut down all but nonessential services, and Americans made sacrifices to slow the pandemic.

With the historic third-quarter growth, the United States in a single quarter has now recovered two-thirds of the economic output lost due to the pandemic during the first half of the year (Figure 1). In the recovery from the 2008-09 recession, it took 4 times as long to regain the same share of lost economic output.

After data confirmed the recovery was well underway beginning in May, the nonpartisan Congressional Budget Office (CBO) in July projected a second quarter contraction roughly in line with the actual decline that occurred, though the CBO projected a third quarter growth rate of just 4.0 percent (17.0 percent at an annual rate). The strong footing of the United States economy prior to the pandemic contributed to the stronger-than-expected recovery our country is currently experiencing.

The United States had the highest GDP growth rate among the G7 countries from 2017 to 2019, with growth more than double the G7 average. While the pandemic hit every major economy around the world, the United States experienced the least severe economic contraction of any major Western economy in the first half of 2020, with the Euro Area economy’s contraction being 1.5 times as severe as the contraction of the U.S. economy.

A resurgence in consumer spending, which accounts for two-thirds of GDP, supported the historic third quarter GDP growth and reflects both the reopening of America’s businesses and the confidence of consumers to spend on goods and services once more. Consumer spending in the services sector alone accounted for nearly half of GDP growth in the third quarter. Greater third quarter spending on recreation, food, and accommodation services—sectors acutely impacted by lockdowns—alone accounted for one-fifth of total GDP growth in the third quarter.

The growth in the third quarter, and the particular strength of American consumers, also reflects the swiftness and magnitude of the aid the Administration provided directly to America’s families, workers, and small businesses. The $2.7 trillion in stimulus that the CARES Act and other pandemic-related legislation supplied is roughly 13 percent as a share of GDP. That is more than twice the size of the 2009 American Recovery and Reinvestment Act (ARRA) as a share of GDP.

This direct aid supported Americans’ income through the pandemic. Total personal income rose above, and still remains above, pre-pandemic levels. Personal income excluding the government transfers provided for in the CARES Act, however, decreased from pre-pandemic levels (Figure 2). Without this income support, the resurgence in consumer spending would likely not have been as strong. Having added back 11.4 million jobs since April with more than 5 in 10 jobs lost in the pandemic recovered, total wages and salaries increased 5 percent in the third quarter and are now just 1.4 percent below pre-pandemic level.

The strong foundation of the pre-pandemic economy and the efficacy of the Trump Administration’s efforts to provide direct economic aid to families and small businesses helped deliver record-setting growth that few predicted would occur earlier this year. Our nation’s economy is poised for continued expansion in the fourth quarter, and the strength of the recovery thus far is a testament to the fortitude and resilience of America’s workers and families.

Reprinted with permission from - Whitehouse.gov

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Patriot Will
30 days ago

Sadly, many Americans are still taking our freedoms for granted. Many of us are acting like complacent cattle lazily munching on our grass and hay, totally oblivious to an approaching hurricane. President Trump should, and deserves to, win handily. If he doesn’t, your guess is as good as mine. Will we get destroyed by the hurricane of political, social, and economic unrest — or will we continue as a Constitutional Republic? Please vote for President Trump, and please pray that God has mercy on the USA.

GT Patr
1 month ago

Gee. I’m the only guy on here ? Tonight Tucker Carlson had a great interview with Glen Greenwald of ” The Intercept” who stated
that the CIA immediately set out to discredit and destroy Trump. He referred to them as “CIA goons”. Trump has , among many
other accomplishments, shown the DC swamp as being a machine that will eliminate anyone who questions them. We don’t have
a republic. We are an early KGB ( russia: 1970s) state. My key concern is do we care ?

30 days ago

And the terrorist Barry Soetoro a.k.a. Barack Hussein Obama, wants to take credit for Trump’s Great Economy. What a cynical corrupt liar!

Linette Murray
30 days ago

We are VERY happy to see that our President is carrying on his promises and policies to Make and Keep America Great!! This is excellent news and we are hoping, voting, talking up our President’s accomplishments past, present and future!

30 days ago

The quarterly GDP growth was amazing. It is a V shaped recovery BUT the mainstream media is presenting it in such a way that its listeners (the uninformed) think this was a negative event.The MSM is only comparing the economy to what we had before the Pandemic hit and implying that is “nothing news” ??

GT Patr
1 month ago

Thank you AMAC Even Fox is ignoring this story.

30 days ago

President Trump – More America First and Great with the economy!
Let’s go , a MASSIVE Red Wave to Save Our Country!

30 days ago

My 5 wishes for the New Year// TRUMP is PRESIDENT/Senate is Republican controlled/House is Republican controlled/Major changes to the FBI/management/ and Pelosi is thrown out on her old old old ASS////////

30 days ago

The news networks refuse to let their mushrooms (viewers) know anything favorable about Mr. Trump. It’s best to keep them in the dark. However, in this new age we have so many additional news sources. The original networks are now irrelevant. Viewers no longer have to listen to the news networks – now the enemy of the people!

Vilas Gamble
30 days ago

Here we are just a few days before the election and the mainstream polls are trying to tell us that the election is over. Joe Biden has such a large lead that there is no way President Trump can win so we might as well stay home. Don’t fall for it. If you have not voted yet, no matter what the odds seem to be, get to the pools on Tuesday and vote! I have posted this before but am doing it again just as a reminder of what is at stake.                       The Rise and Fall of Great Civilizations “A… Read more »

30 days ago

With economic results like this after a almost total shutdown of our economy, Trumps refusal to capitulate to the “science” and allow the country to reopen is what fueled the recovery, 99% of COVID-19 patients will recover, and with all the new therapeutics, the loss of collateral lives because of shutting down far out weigh the effects of lives lost by opening up the country. One life lost is to many, like Trump says we cannot let fear be the controlling factor, this is a war and we need to fight it to win, we are all soldiers doing battle,… Read more »

Lori Oneal
30 days ago

I am so glad our economy is coming back. And now you see so many cases again right before the election. Now, I know it is real but so much of it is not reported and now the numbers are sky rocketing again in every state. I live in Washington state and we all know we need a new governor cause ours is a dictator,how can we stop this madness?

30 days ago

God Bless America and President Trump!! Everybody vote straight red.

Paul W
30 days ago

I guarantee that if beijing-biden was at the helm, that “V” graph recovery would look like a backslash \. A heavily regulated, government bureaucracy controlled economy would’ve collapsed completely.

Last edited 30 days ago by Paul W
30 days ago

He’s my President and I already voted for 4 more years! Unfortunately I am one who lost my job back in May and have not been able to get another one. It’s still tough out there from what I am seeing.

Robin W Boyd
30 days ago

It doesn’t matter if we are liberal or conservative minded, as long as we are flexible and rational and don’t stray to either extreme. Rational American citizens must vote for the man who has most benefitted American citizens of all ilk’s. Stay on course!

30 days ago

Americans will stand up for our country. I hope this is on November 3: and Nov. 3 will be the day if the citizens are awake. Preventing free speech should be noxious to these CEO’s who were called to the Senate hearing. If they don’t change course, they will represent people for whom the job is the paycheck (and no sense of right and wrong guides them). When Americans find out that black lives matter is the only group that still has freedom, they will stand up.

Carla H
30 days ago

I hope this gets reported on ALL news channels so Americans can see the truth. Can anything be done about the media that is not the real news but puppets? Whatever happened the the Walter Cronkites of the world?

GT Patr
1 month ago

I guess I never realized what a genius Obama was. LOL.

Stephen Russell
30 days ago

Then add to rebuild riot zones in cities Once & if riots end for jobs.

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