3rd quarter growth (Image courtesy BEA)
The Bureau of Economic Analysis on Thursday announced that the U.S. economy grew by a record 33.1% during the third quarter, giving support to President Trump's confidence in a "V-shaped" recovery from the damage sustained from the Chinese COVID-19 pandemic.
In the second quarter, real GDP decreased 31.4%, the federal agency noted.
"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 full economic effects of the COVID-19 pandemic cannot be quantified in the GDP estimate for the third quarter of 2020 because the impacts are generally embedded in source data and cannot be separately identified," it said.
"The increase in real GDP reflected increases in personal consumption expenditures (PCE), private inventory investment, exports, nonresidential fixed investment, and residential fixed investment that were partly offset by decreases in federal government spending (reflecting fewer fees paid to administer the Paycheck Protection Program loans) and state and local government spending. Imports, which are a subtraction in the calculation of GDP, increased."
The BEA said the increase in PCE "reflected increases in services (led by health care as well as food services and accommodations) and goods (led by motor vehicles and parts as well as clothing and footwear)."
"The increase in private inventory investment primarily reflected an increase in retail trade (led by motor vehicle dealers). The increase in exports primarily reflected an increase in goods (led by automotive vehicles, engines, and parts as well as capital goods). The increase in nonresidential fixed investment primarily reflected an increase in equipment (led by transportation equipment). The increase in residential fixed investment primarily reflected an increase in brokers' commissions and other ownership transfer costs."
The report said current-dollar personal income decreased $540.6 billion in the third quarter, in contrast to an increase of $1.45 trillion in the second quarter.
"The decrease in personal income was more than accounted for by a decrease in personal current transfer receipts (notably, government social benefits related to pandemic relief programs) that was partly offset by increases in compensation and proprietors' income.
"Disposable personal income decreased $636.7 billion, or 13.2 percent, in the third quarter, in contrast to an increase of $1.60 trillion, or 44.3 percent, in the second quarter. Real disposable personal income decreased 16.3 percent, in contrast to an increase of 46.6 percent."
Fox Business noted noted the Commerce Department "calculates the GDP on a quarter-over-quarter basis as if that level of growth were sustained for a full year; in times of huge swings up or down, it can exaggerate both the decline in growth and the subsequent rebound. Because third-quarter growth will be measured against second-quarter growth -- a historically low baseline -- any bounceback at all would generate huge growth."
The nation lost millions of jobs during the COVID-19 shutdowns, of which more than half have been restored.
The post U.S. economy explodes in 3rd quarter, up record 33.1% appeared first on WND.
