The economy grew at a rate of more than 33% last quarter, beating expert predictions. What sectors led the growth and what is predicted for next quarter?
Summary
GDP data for the 3rd quarter of 2020 was released yesterday, showing strong growth of 33% from the previous quarter’s historic decline of 31.4%.
- While the economy didn’t regain the entirety of previous quarter’s loss, the 3rd quarter numbers did beat analyst expectations.
- According to the Wall Street Journal, purchases in durable goods (more expensive items such as vehicles, computers, furniture) boomed while the housing market also saw a nearly 60% increase.
- CNN explains that the quarterly data is annualized, meaning it is adjusted to assume the quarterly growth rate will maintain for a year, so year to year comparisons are easier to understand.
- Though the economic recovery is “on track”, analysts are concerned the next quarter’s growth could be “much slower” in the wake of the nationwide surge in COVID-19 cases.
- President Trump and former Vice President Biden offered contrasting views on the economic report, with Trump praising the report and tweeting “next year will be FANTASTIC”. On the other hand, Biden said millions of Americans have not felt the impact of the report, arguing too many are still out of work.
- The Washington Post Editorial Board wrote that while the numbers were good news for Americans, there were still significant gaps in the labor market and place the blame for the uneven recovery squarely on President Trump and Congress.
- Reporting in the New York Times says “the economy is still in a hole” and annualized figures are “misleading”.
- The Daily Beast asked its readers to not believe the “massive and desperate lie” the Trump Administration and campaign will tout with respect to the 3rd quarter numbers.
- The Editorial Board at the Wall Street Journal celebrated the report, writing that it occurred “even without more government fiscal spending.” The board argues that while there is still work to be done, lockdowns in response to the rising coronavirus numbers will risk the gains the American people have made.
- Fox News noted their competition in prime-time cable news chose to ignore the good economic news, while publishing an op-ed from Brian Brenberg that argues the GDP report “comes at a critical time in the election’s most critical states, and it “tipped the scales” in the election towards President Trump.
- In its reporting, the Washington Times wrote the quarterly numbers “gives President Trump a positive closing argument” leading up to Election Day.
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© Dallas Gerber, 2020
