US economy rebounds to grow at record 33% rate in third quarter

US economy rebounds to grow at record 33% rate in third quarter
By: World News Posted On: October 29, 2020 View: 36

US economy rebounds to grow at record 33% rate in third quarter

The US economy grew at an annual rate of 33.1% in the third quarter, by far the largest quarterly gain since records began in 1947.

It follows a historic 31.4% decline during the second quarter, as the US was among many world economies hit by the coronavirus pandemic.

The US government reports quarterly GDP changes as annual rates, meaning that the change for any quarter is calculated as if it had occurred for an entire year.

The GDP figure is among the last major economic updates before next week's presidential election, where incumbent Donald Trump is behind Democratic rival Joe Biden in the polls.

The economic good news will do little, however, to distract many voters from the human cost of the COVID pandemic, which has killed more than 227,000 Americans and saw tens of million lose their jobs.

The government's response was a rescue package worth more than $3trn, which encouraged consumer spending - a major factor in the GDP increase.

However, the GDP is still below where it was in the fourth quarter of last year before the pandemic began, with further government help in doubt.

More from Covid-19

The number of infections also shows little sign of slowing across much of the country, leaving the possibility that the economy may be hit by another round of restrictions in some states.

Mark Zandi, chief economist at Moody's Analytics, said: "We have a pretty noxious brew developing with the pandemic intensifying, the lack of any further government stimulus, and signs showing that the economy is already slowing pretty significantly.

"Many of the jobs in retailing, leisure and airlines have been permanently lost, and those folks will have to find different work, and that will take time."

The Labor Department said on Thursday that 751,000 people filed for state unemployment benefits in the week ending 24 October, compared to 791,000 the previous week.

This was well below the record 6.867 million in March but above the 665,000 seen during the worst of the 2007-09 recession.

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