The United States economy expanded at a record 33.4 percent annual pace from July through September, the Commerce Department said on Tuesday, delivering the last of three estimates on the economyâ€™s third-quarter performance.
But it is likely a resurgence in coronavirus cases slowed growth sharply during the last three months of 2020.
The July-September growth spurt â€” upgraded slightly from Commerceâ€™s previous estimate of 33.1 percent, announced last month -â€” marked a sharp recovery from the second quarterâ€™s 31.4 percent drop, the worst in records dating back to 1947. The American economy went into freefall when the pandemic hit hard in mid-March.
Consumer spending surged at an annual rate of 41 percent and private investment shot up by 86.3 percent to lead the third-quarter rebound.
Employers slashed 22 million jobs in March and April, then began to steadily recall furloughed workers. But the US is still 9.8 million short of the jobs it had in February, and hiring has slowed every month since June.
But an uptick in new COVID-19 cases â€” now averaging about 220,000 a day, up from fewer than 35,000 in early September â€” is causing governments to issue lockdown orders and keeping Americans at home to avoid infection.
Growth in gross domestic product â€” the broadest measure of economic output â€” is expected to slow to just 2.8 percent in the fourth quarter, according to the Conference Board, a business research group.
The outlook would have been bleaker if Congress had not passed a $900bn economic relief package that includes $600 direct stimulus payment to most Americans, an extra $300 a week in unemployment benefits and new subsidies for hard-hit businesses and renters facing eviction.