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US economy surges 33.1% in Q3, biggest gain on record: Govt
However, compared to the July-September stretch of 2019, the third quarter contracted 2.9 percent after falling 9.0 percent year-over-year in the second quarter.
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People dine inside a restaurant in Little Italy as New York City restaurants are allowed to open their doors to 25 percent capacity on Sept. 30, 2020 in New York City. (AFP/Spencer Platt)
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fter the worst downturn on record, the United States economy posted the strongest recovery on record as it expanded at a 33.1 percent annual rate in the third quarter, the Commerce Department reported Thursday.
That came after a 31.4 percent drop in the April-June period during the worst of the COVID-19 pandemic, and a five percent drop in the first quarter. The annual rate is a measure that shows the full-year result if the gain in a single quarter were translated over 12 months.
However, compared to the July-September stretch of 2019, the third quarter contracted 2.9 percent after falling 9.0 percent year-over-year in the second quarter, according to the data, the first estimate of the results in the latest three months.
"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 Commerce Department said in the release. It noted, however, that the "full economic effects" of the coronavirus cannot be separately measured.
The massive gain – the biggest since record-keeping started in 1947 – was driven by a surge in spending by consumers and businesses.
But economists warn that much of that was fueled by the massive $3 trillion in government aid that flooded the economy in the early weeks of the pandemic.
Much of that funding to jobless workers and businesses has run out, and other data show spending tapered off in September and the recovery is losing momentum.
And the gain in the latest quarter was offset by a drop in government spending: federal government spending dropped 6.2 percent and state and local government fell 3.3 percent.
