The economic system grew at a report tempo within the third quarter—increasing 7.4% over the prior quarter and at a 33.1% annual rate—recovering about two-thirds of the bottom it misplaced earlier in the coronavirus pandemic.
Gross home product—the worth of all items and providers produced throughout the economic system—jumped as pent-up shopper demand and authorities help helped energy spending after disruptions associated to Covid-19 eased. The rise in development, the largest bounce in data courting to 1947, adopted a report decline earlier within the pandemic when the virus disrupted enterprise exercise throughout the nation.
That places the economic system about 3.5% smaller than on the finish of final yr, earlier than the pandemic hit.
“Document good points aren’t sufficient to get us out of the outlet that Covid left us in,” Diane Swonk, chief economist at Grant Thornton, mentioned. She cited dangers from a latest U.S. surge in infections as a possible financial headwind within the present fourth quarter, saying, “It’s laborious to reopen an economic system except employees and customers really feel secure and wholesome.”
The third-quarter GDP improve adopted a 9% quarter-to-quarter decline within the second quarter, or a 31.4% annualized drop, adjusted for inflation and seasonal fluctuations. U.S. GDP is often reported at an annual price, or as if the quarter’s tempo of development continued for a full yr. However the pandemic triggered excessive swings in output—a extreme drop adopted by a fast rebound—making the annualized numbers deceptive as a result of nobody expects second- or third-quarter numbers to proceed for a full yr.