The last revised official data showed that after a record decline in the second quarter, U.S. GDP finally rebounded beyond expectations in the third quarter, spurred by more than $3 trillion in government antivaccine. But outsiders are not more bullish on economic performance in the first quarter of next year because of the vaccine’s availability.
On Tuesday, 22nd EST, the Bureau of Economic Analysis (BEA) of the U.S. Department of Commerce announced that in the third quarter of this year, the final value of the annualized quarterly growth rate of U.S. GDP was 33.4%, the highest growth rate since the record in 1947, higher than the market expected growth rate of 33.1%, the initial growth rate announced in October and the revised growth rate announced last month were also 33.1%.
In the second quarter of this year, the final value of the annualized quarter-over-quarter growth rate of U.S. GDP was -31.4%, the largest decline since records began, despite an upward revision from the initial -32.9% and final -31.7%.
The second quarter GDP decline reflected lower personal consumption expenditures, imports and exports, nonresidential fixed investment, private inventory investment, residential fixed investment, and state and local government spending during the new crown pneumonia outbreak, with the decline in these GDP components partially offset by increased spending by the U.S. federal government. Compared to the second quarter, GDP rebounded in the third quarter, driven by increased consumption, higher business and residential investment, and a rebound in exports.
Personal consumption was the main driver
The final value shows that 21 of the 22 industries contributed positively to GDP growth in the third quarter, with the automotive industry being the most supportive and only one growth decline in the mining industry dragging down GDP. this may be due to lower oil prices affecting spending by companies in the industry on facilities such as drilling.
By component, the largest contributor to positive GDP growth in the third quarter was personal consumption expenditures, which grew at a record annualized rate of 41.0%, higher than market expectations of 40.6%. However, the media noted that consumer growth has cooled into the fourth quarter, with retail sales falling in both October and November, and household income being affected by the government’s weekly unemployment benefits set to expire. The number of first-time jobless claims released last week hit a three-month high last week.
Compared to last month’s revisions, the third-quarter final GDP breakdowns saw upward revisions to consumer personal spending and business investment, partially offsetting the downward revision to exports. The specific itemized adjustments were.
▪ The contribution of personal consumption to GDP growth rose to 25.44% from a revised 25.22% in the previous month, compared with the initial value of 25.27%.
▪ The final value of the contribution of fixed asset investment rose to 5.39% from a revised 5.23%, compared to an initial value of 4.96%.
▪ the final value of the contribution of private inventories was 6.57%, up from the preliminary value of 6.62% and the revised value of 6.55%.
▪ The contribution of exports to GDP fell from 4.95% to 4.89%, while the drag from imports rose from -8.12% to -8.10%.
The final value of the impact of government consumption expenditure was -0.75%, with a revised value of -0.76%.
BEA also released slightly weaker-than-expected inflation data, personal consumption expenditure price index (PCE) grew 3.5% in the third quarter, the market expected an increase of 3.6%, down 1.8% in the second quarter; core PCE grew 3.4% in the third quarter, the market expected growth of 3.5%, down 0.8% in the second quarter.
Record growth in corporate profits
Following a 10.3% decline in the second quarter, U.S. corporate profits rose 27.4% in the third quarter from a year earlier, the fastest growth rate on record. Commentary said the corporate profit surge was supported by the federal government’s Payroll Protection Program (PPP), which was launched during the epidemic.
▪ Domestic nonfinancial corporate profit growth finalized at 44.3 percent, compared with a revised 43.8 percent posted last month and a 12.9 percent decline in the second quarter.
▪ Final domestic financial corporate profit growth of 2.6 percent, compared with a revised 5.4 percent increase and a 6.1 percent increase in the second quarter.
▪ Profit growth from the rest of the world ended at 13.4%, revised to 10.3%, after a decline of 18.9% in the second quarter.
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