The U.S. economy experienced record-setting growth in the third quarter of 33.1 percent, the Bureau of Economic Analysis announced Thursday.
That was the fastest pace since the government started keeping records in 1947 and followed a historic shrinkage rate of 31.4% in the second quarter.
The surge in GDP growth will recoup a little over half of the 10.6% plunge in output in the first half of the year. By comparison, the economy contracted 4% from peak to trough during the 2007-09 Great Recession.
The COVID relief bill that provided a lifeline for many businesses and the unemployed, jump-started consumer spending, which on its own is estimated to have made up about 80% of the jump in GDP.
But since Nancy Pelosi and the Democrats refusing to pass President Trump’s latest $1.8 Trillion Coronavirus aid package. Funding from previous bills have been depleted, and thanks to Pelosi and the Democrats politicizing the COVID pandemic, any hopes for another relief bill won’t happen until weeks after the November election.
Estimates For The Fourth Quarter GDP Hover Around 5% Growth.
Consumer spending, which accounts for more than two-thirds of the U.S. economy, is expected to have rebounded at a rate of about 39% in the third quarter, driven by purchases of goods like motor vehicles and electronics.
The record-setting 3rd Quarter GDP rate was due to spending that was boosted by billions of dollars in government COVID relief, including a $600 weekly unemployment subsidy and a one-off $1,200 check to households.
But with no new relief package in the near future, consumer spending will be substantially slowed with some experts predicting less than 5% growth for the 4th quarter.
James Knightley chief international economist at ING in New York stated:
‘We cannot understate the importance of the government support for household incomes,’
The $1,200 checks and the expansion of unemployment benefits meant nearly 70% of recipients received higher incomes than when they were actually working.’