Kamis, 29 Oktober 2020

US economic activity rebounded at a record pace in the third quarter - Financial Times

The US economy grew in the third quarter at its fastest pace in postwar history as activity bounced back from coronavirus lockdowns, although output has yet to return to pre-pandemic levels.

The jump in gross domestic product was worth 33.1 per cent on an annualised basis — the measure used by the US commerce department’s Bureau of Economic Analysis. Economic output rose 7.4 per cent compared with the previous quarter, the metric used by many other advanced economies to calculate GDP.

The data released on Thursday come just days ahead of the US presidential election, offering an opportunity for Donald Trump to tout the economic recovery in his final pitch to voters. He is facing an uphill battle to win a second term against Joe Biden, the Democratic challenger.

While the improvement between July and September was stronger than had been expected earlier in the year, it masks concerns that the US economic rebound is slowing down again as the disease surges and the effects of fiscal stimulus fade.

The recovery has so far been incomplete and uneven, with 10.7m fewer Americans employed in September compared with February, before the coronavirus began spreading across the country. Despite the recovery in GDP in the third quarter of this year compared with the second quarter, it fell 2.9 per cent when compared with the third quarter of 2019.

“The reality is that the GDP numbers demonstrate that the US economy did indeed rebound strongly as lockdown measures were lifted,” said James McCann, Aberdeen Standard Investments senior global economist. “But given that boost is behind us, Covid infections are surging again and Congress cannot agree on another stimulus package, such good numbers are not going to last.”

Mr Trump and his top officials have been trying to talk up the GDP data ahead of its release, knowing that it was very likely to exceed the previous record of 16.7 per cent annualised growth recorded in 1950. The increase in the third quarter followed a 5 per cent contraction in the first quarter and a 31.4 per cent drop on an annualised basis in the second quarter, when the economic fallout from the pandemic was at its worst.

The third quarter data showed a 40.7 per cent surge in consumption as Americans returned to spending — particularly on durable goods. Private investment rose sharply as well, by 83 per cent, with equipment posting strong gains.

Residential investment rose, a sign of strength in the housing market during the pandemic. But there were other less encouraging signs: government spending fell 4.5 per cent while investment in structures dropped 14.5 per cent.

Mr Biden’s campaign had dismissed overly optimistic declarations from the president about the data even before it was published.

“Trump’s ‘mission accomplished’ rhetoric does not capture the true direction or state of the US economy. Most important, the American people will see through the sham, because they are living with the economic consequences of the president’s failures,” Kate Bedingfield, Mr Biden’s deputy campaign manager, wrote in a memo sent to reporters on Wednesday.

America’s continued economic struggles were highlighted on Thursday as data showed new US jobless claims fell to 751,000 last week, remaining at historically high levels.

Initial applications for unemployment benefits dropped by 40,000 in the week ending October 24 from the previous week’s revised level, according to the US labour department. That compared with economists’ forecast for 775,000 claims. 

Though claims have dropped from a record 6.87m in March, they remain well above their peak during the 2008 financial crisis.

The federal Pandemic Unemployment Assistance programme, which offers benefits to the self-employed and others who would not qualify for regular benefits, registered 359,667 new claims on an unadjusted basis, up from 344,905.

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2020-10-29 12:47:00Z
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