The U.S. economy experienced record growth in July, August and September of 33.1 per cent, the Bureau of Economic Analysis announced Thursday – a figure President Trump immediately touted as ‘FANTASTIC!!!’
The figure 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 record-making growth figure came as Trump was eager to put the economy in the forefront of the final days of the election – although it follows a period of steep negative growth, with millions of Americans still filing for unemployment.
‘GDP number just announced. Biggest and Best in the History of our Country, and not even close,’ the president wrote on Twitter. ‘Next year will be FANTASTIC!!!’
Trump then used the development to attack rival Joe Biden, who is centering his campaign around the coronavirus, while Trump makes a push for reopening.
The two were going head-to-head in Tampa, Florida, with Trump holding a mass rally and Biden addressing a smaller event.
‘However, Sleepy Joe Biden and his proposed record setting tax increase, would kill it all. So glad this great GDP number came out before November 3rd,’ Trump wrote.
The Bureau’s estimate Thursday of third-quarter growth regained only about two-thirds of the output that was lost early this year when the economy essentially froze as safety orders forced restaurants, bars and many retailers to shut down.
But the markets ignored the apparent good news with the Dow up just 48 points by midday, having slid almost 2,000 points since last Friday as traders grapple with soaring COVID numbers, lockdowns in Europe and
President Donald Trump tweeted about the record-breaking growth, and predicted next year would be ‘FANTASTIC!!!’
Democratic presidential candidate Joe Biden blasted Trump’s handling of the coronavirus in his statement on the economic report as he headed to Florida to campaign with his granddaughter Natalie, 16, whose father was Beau Biden
However Biden blasted Trump for his stewardship of the economy and the pandemic in a statement on the new economic report.
‘President Trump’s failure to take action this spring to get control of the coronavirus led to gutted businesses, closed schools and tens of millions of people out of work that could have been prevented,’ he said.
‘This report underscores three inescapable truths about Donald Trump’s economy: we are in a deep hole and President Trump’s failure to act has meant that Q3 growth wasn’t nearly enough to get us out of; the recovery is slowing if not stalling; and the recovery that is happening is helping those at the top, but leaving tens of millions of working families and small businesses behind.’
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% peak to trough during the 2007-09 Great Recession.
More than $3 trillion in federal pandemic relief spending fueled historic consumer spending, but the deep scars from the COVID-19 recession could take a year or more to heal.
Just over half of the 22.2 million jobs lost during the pandemic have been recouped, and layoffs persist. The economy plunged into recession in February.
The economy is now weakening again and facing renewed threats. Confirmed viral cases are surging. Hiring has sagged. Government stimulus has run out. With no further federal aid in sight this year, Goldman Sachs has slashed its growth forecast for the current fourth quarter to a 3% annual rate from 6%.
‘We have a pretty noxious brew developing with the pandemic intensifying, the lack of any further government stimulus and signs showing that the economy is already slowing pretty significantly,’ said Mark Zandi, chief economist at Moody´s Analytics.
Thursday’s estimate of GDP growth is the last major economic report before Election Day, after a campaign that President Donald Trump has sought to build around his economic record before the pandemic hit. Trump has drawn generally solid public support for his handling of the economy.
Though the unemployment rate, at 7.9%, is down significantly from 14.7% at the start of the pandemic recession, it is still historically high. And hiring has slowed for three straight months. The economy is still roughly 10.7 million jobs short of recovering all the 22 million jobs that were lost to the pandemic.
No one disputes that the Commerce Department’s report Thursday on gross domestic product – one of the last major economic scorecards before next week’s presidential election – is one for the history books.
Nonetheless, it will do little to mitigate the human tragedy inflicted by the coronavirus pandemic, with tens of millions Americans still unemployed and more than 222,000 dead.
With five days remaining to Election Day and trailing in most national opinion polls, Trump will probably seize on the stunning rebound in GDP as a sign of recovery following the deepest decline in at least 73 years.
He telegraphed his intentions at an Arizona rally on Wednesday, bringing up a key economic figure he has been anticipating for months.
‘You’re going to have a very big number. I even say hold off on your vote until it happens,’ he told a crowd of supporters in Bullhead, Arizona, fusing his economic prediction with his preference for in-person voting.
President Donald Trump told his supporters in Arizona Wednesday if the nation’s quarterly growth figure coming out Thursday isn’t big that ‘you don’t even have to vote for me’
Market gloom: Although the Dow Jones was up slightly Thursday, it has lost almost 2,000 points since last Friday as fears mount hat the recovery is fragile and COVID cases on the rise put it in jeopardy
On its way back – but still a ways to go: The economy grew at 33.1 per cent,the biggest jump since the government started keeping records in 1947. But half of the 22 million jobs lost have still to come back
‘Because a lot of you want to wait until Tuesday anyway. It’s going to be a great, great red wave. You know what, before that happens, and I don’t know what it is, but the Atlanta Fed just predicted a very big number. Biggest in the history of our country,’ he continued.
You’re going to have GDP coming out. It’s going to be announced. And it’s going to be probably announced on the 1st. Maybe even a day before the first. And if that number’s not big you don’t even have to vote for me, okay?’ he said.
His prediction came on a day when markets tanks amid an ongoing wave of coronavirus cases and fears of more lockdowns. The Dow Jones Industrial Average was down 943 points, and the broader S&P 500 was down 120 points, or 3.5 percent.
Record-smashing though it is, the GDP figure can be misleading, because the annualized rate – which already magnifies changes, is in relation to the annualized contraction of 31 per cent in the second quarter.
Even still, it likely will leave U.S. output some 4% below its level in the fourth quarter of 2019, a fact Trump’s challenger, Democrat Joe Biden, is almost certain to highlight along with signs that the growth spurt is fast petering out.
Adding to the market’s concerns is the collapse of stimulus talks between House Speaker Nancy Pelosi and the administration.
The speaker released a letter to colleagues spelling out the many substantial areas where the two sides remain far apart.
If Trump were to lose the election, it is not clear how either side would respond in a lame duck Congress where political incentives would change.
Christopher Way, associate professor of government at Cornell University said: ‘It is economic performance in the first half of an election year that matters. For people who are still out of work or struggling with dwindling savings after the stimulus wears off, it will have little impact.’
The federal rescue package provided a lifeline for many businesses and the unemployed, juicing up consumer spending, which on its own is estimated to have made up about 80% of the jump in GDP.
But government funding has been depleted with no deal for another round of relief in sight, and new COVID-19 cases are spiraling across the country, forcing restrictions on businesses like restaurants and bars.
‘There is still a long way to go before we get back to where we were before the pandemic, probably the end of 2021,’ said Gus Faucher, chief economist at PNC Financial in Pittsburgh, Pennsylvania. ‘That assumes we get additional stimulus. Growth will slow through 2021 and the recovery will get more difficult as some structural issues with the economy persist.’
Growth estimates for the fourth quarter are below a 5% rate.
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.
Spending was boosted by billions of dollars in government transfers, including a $600 weekly unemployment subsidy and a one-off $1,200 check to households. But spending on services likely remained weak, which would leave consumer spending at least 3.5% below its fourth quarter level. Services like airline travel remain depressed.
‘We cannot understate the importance of the government support for household incomes,’ said James Knightley chief international economist at ING in New York. ‘The $1,200 checks and the expansion of unemployment benefits meant nearly 70% of recipients received higher incomes than when they were actually working.’
The shift toward goods spending pulled in imports, likely resulting in a widening of the trade deficit. Some of the imports, however, ended up in warehouses. The accumulation of inventory likely offset the trade hit to GDP growth.
Though a turnaround is expected in business investment after the second-quarter drubbing, economists believe the bounce would be temporary as demand for goods that do not compliment life-style changes brought by COVID-19 remains weak. The pandemic has also crushed oil prices, weighing on spending on nonresidential structures like gas and oil well drilling.
Boeing Co reported its fourth straight quarterly loss on Wednesday and announced it now expected to eliminate some 30,000 jobs through buyouts, layoffs and attrition – nearly double what it initially planned – for a global workforce of around 130,000 by end-2021.
The housing market was likely another star performer, thanks to historic low interest rates. But government spending was probably a drag as transfers largely happened in the second quarter. Government spending was also likely pressured by cuts at state and local governments, whose finances have been squeezed by the coronavirus.
- Donald Trump Talks Family, Women in Unearthed Transcript: "When I Come Home and Dinner's Not Ready, I Go Through the Roof"
- Fact checking the misleading immigration statistic from Trump's World Series ad
- Trump acknowledges China policies may mean US economic pain
- Fact Check: Trump’s shoddy info on Syria, impeachment
- Husband-wife duo on Trump legal team seen as skilled lawyers
- After Omarosa tape, Lara Trump is no longer the least controversial Trump
- Coders of the world, unite: can Silicon Valley workers curb the power of Big Tech?
- US jobs report Friday is likely to show another solid gain
- 10 Threatened Hiking Trails That Need Your Help
- Will your 401(k) feel the squeeze of higher tariffs?
- Airline apologizes after threatening to boot woman for wearing a crop top
- Sundance: Keira Knightley, Daisy Ridley and #MeToo Movement Films Make Lineup
- Jordan Pruitt explains why she's sharing her #MeToo story now
- The Long Trail to Jail
- Drilling overwhelms agency protecting America's lands
- Divided House approves impeachment rules
- The Haitian Revolution Makes the Case for Reparations Clear
- Al Jazeera’s (Global) Mission
- 18 of the best countries to visit in 2018
- Climb Higher
'Next year will be FANTASTIC!!!' Donald Trump touts record-shattering 33.1% growth from July to September - but economy is still in a deep downturn caused by coronavirus and lockdowns have 1990 words, post on www.dailymail.co.uk at October 29, 2020. This is cached page on Talk Vietnam. If you want remove this page, please contact us.