The U.S. economy exploded in the third quarter, the fastest pace ever recorded, growing at an annualized pace of 33.1 percent, the U.S. Commerce Department said Thursday.
Weekly unemployment claims also fell under 800,000 for the first time since March. Since the coronavirus pandemic began more than 65 million Americans, or roughly 40% of the nation’s labor force, have sought unemployment assistance.
The total output of goods and services in the United States grew at the greatest pace on record since 1947, surpassing a 16.7% surge in 1950 during the Truman administration.
President Donald Trump warned a cheering crowd at a Tampa rally Thursday electing his opponent former vice president Joe Biden could have devastating effects on the rebounding economy.
“You will have a crippling depression the likes of which you have never seen if Sleepy Joe becomes your president,” he said. “Your 401(k), throw them out the window, because you know what is going to happen? The stock market has a big headwind. We are doing good. Did you see the number? 30.1 GDP, the biggest in the history of our country by almost triple, right? Almost triple. Now it is very much bigger than any GDP we have ever had,” Trump said.
“You have to go back to the 1950’s. It is less than half. This is the greatest number, 33.1%. I would have said I will take 12%. 12% would be very nice. Nobody ever heard of 12%. 33.1. Let me tell you, I never even thought of this one. They won’t even talk about it. This is the biggest event in business in 50 years. Nobody has ever seen a number like this,” the president bragged.
Despite everything Democrats have done to stunt the economy with prolonged lockdowns in states they control, it has grown at an astounding pace. House Speaker Nancy Pelosi (D-CA) has thrown all kinds of obstacles in the path of Republicans who have been trying to negotiate legislation for a second stimulus for struggling Americans, a Paycheck Protection Program, small business assistance and unemployment assistance.
In spite of her recalcitrance, the economy has recovered much of the gains it had achieved under the Trump administration before the pandemic triggered record job losses and business closures.
The country was experiencing the longest record of economic expansion in nearly 11 years when the pandemic struck.
“The president built the world’s best economy once and he’s rapidly doing it again,” Trump 2020 communications director Tim Murtaugh said in a statement.
“GDP number just announced,” Trump tweeted Thursday morning. “Biggest and Best in the History of our Country, and not even close. Next year will be FANTASTIC!!! 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.”
The third-quarter GDP gain was fueled by a record 40.7 percent increase in consumer spending. Business investment increased 20.3% last quarter due to a 70.1% surge in investment in equipment. Residential investment also surged an impressive 59.3%, boosting home builders as demand for homes rises.
Economists had expected the economy to grow by only 30.9 percent, surpassing expectations, but it fell short of where it was at the beginning of last year by 3.5 percent.
The economy had contracted at an annual revised rate of 31.4% in the previous quarter, the sharpest decline in modern American history.
Some economists were hoping for bigger gains after the release of positive data on durable goods data and international trade earlier this week.
The Commerce Department estimated Thursday the economy regained only about two-thirds of the output that was lost due to coronavirus lockdowns which virtually shuttered commercial activity.
The third-quarter growth follows a 31.4 percent decline in the second quarter, a 9 percent contraction on a quarterly basis, and a five percent annualized contraction in the first quarter.
The economy is still expanding, but at a slower pace. Economists expect growth to continue in the fourth quarter.