The U.S. Commerce Department reported on Dec. 22 that the annual growth rate of U.S. GDP was revised slightly upward to 33.4% in the third quarter, better than market expectations.
The U.S. Department of Commerce confirmed Tuesday (Dec. 22) that the U.S. economy grew at a record pace in the third quarter, with annual growth revised slightly upward to 33.4 percent, better than market expectations, driven by more than $3 trillion in post-CCP virus (Wuhan pneumonia) relief and policies in the wake of the epidemic embargo.
As the official report card for the U.S. economy, gross domestic product (GDP) growth was revised upward to 33.4 percent from 33.1 percent for the three-month period from July to September, reflecting the government’s efforts to reopen businesses and resume activities that were delayed or limited by the outbreak. The economic rebound followed a 31.4 percent drop in GDP in the second quarter after most U.S. businesses had taken embargo measures from April to June to prevent the spread of the outbreak.
The Commerce Department said that in the third quarter, consumer spending and business investment (private inventory investment, exports, nonresidential fixed investment and residential fixed investment), the main engines of the U.S. economy, both grew sharply, but were offset by lower federal government spending (reflecting lower payments on Payroll Protection Plan loans), lower state and local government spending and lower import trade.
Consumer spending was led by health care, food, lodging, apparel, footwear, and autos and parts; private inventory investment was reflected primarily in retail sales, led by auto dealers; export trade was reflected primarily in autos, engines, parts and capital goods; non-residential fixed investment was primarily in transportation equipment; and residential fixed investment was reflected primarily in increases in broker commissions and other ownership transfer fees.
The Commerce Department said domestic resident income (GDI) increased 25.8 percent in the third quarter, compared with a 32.6 percent decline in the second quarter.
After two quarters of distorted GDP data, the economy will return to a more normal growth rate in the fourth quarter of 2020. Economists expect the economy to grow at an annualized rate of 3.5 percent in the fourth quarter. The outlook for the outbreak assistance package passed by Congress on Monday night (Dec. 21) could bolster the outlook through the first quarter of next year. Some economists, on the other hand, are concerned that it may be difficult to maintain growth momentum in the fourth quarter amid increasing new cases and dwindling fiscal stimulus, or a double dip recession (Double Dip Recession).
But as the year draws to a close, the U.S. economy has proven more resilient than expected, with the Federal Reserve recently revising its 2020 GDP forecast upward to a 2.4% decline from a previously estimated 3.7% decline.
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