The US economy staged a record-setting rebound from the coronavirus crisis in the third quarter, the feds said Thursday — but there’s still a long way to go before the nation makes a full recovery.
America’s gross domestic product — the value of all goods and services produced here — grew by roughly 7.4 percent from July to September as consumers and businesses emerged from the pandemic-related lockdowns that led to a 9 percent contraction in the second quarter.
That growth equates to an annual rate of 33.1 percent, by far the largest since modern record-keeping began in 1947 and nearly twice the previous record surge of 16.7 percent in the first quarter of 1950, the US Commerce Department data show. Economists were expecting an annualized 31.9 percent jump after the second quarter’s 31.4 percent plunge.
But the recovery is not complete — last quarter’s GDP of $21.1 trillion was still about 2.7 percent below the $21.7 trillion recorded in the fourth quarter of last year, before COVID-19 sparked the worst economic downturn since the Great Depression.
“A record surge in third-quarter GDP will likely mark the beginning of the recovery, after a recession which abruptly started in the fourth quarter of last year and likely ended in the second quarter,” said Yelena Shulyatyeva, senior US economist at Bloomberg Economics. “Yet the scale and unprecedented nature of the COVID-19 downturn will leave lingering scars during the recovery.”
The path to a full rebound appears rocky — another nationwide surge in coronavirus infections and hospitalizations has raised fears that the lockdowns could return in parts of the US as they have in France and Germany.
Moreover, the stimulus measures that put cash in Americans’ pockets and helped shore up consumer spending have run dry with no new agreement in sight for a new spending package from Washington. More than 12 million workers remain unemployed, and layoffs have mounted in recent months as large corporations grapple with the lasting impact of the virus.
The Federal Reserve, which has pushed Congress to pass another stimulus bill, expects GDP to shrink by 3.7 percent this year following growth of 2.3 percent in 2019.
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