Washington (AP) – After the worst economic recession in recent history in the second quarter, the US economy is back with record growth.
From July to September, gross domestic product (GDP) increased 7.4 percent compared to the previous quarter, despite the Crown crisis. The increase is mainly the result of the resumption of business and deals that were not possible in the second quarter due to the lockdown of the crown, as the US government said.
In absolute numbers, economic output is still 3.5 percent lower than that of the fourth quarter of 2019, that is, the last quarter before the pandemic.
Under the usual approach in the US, GDP increased in the third quarter of the year by 33.1 percent, more than ever. In the case of large fluctuations, the quarterly comparison, that is, growth of 7.4 per cent, is more significant.
Analysts had anticipated growth of this magnitude for the world’s largest economy. The growth, mainly supported by private consumption, shows the economic recovery after the pandemic lockdown in the second quarter. Analysts also expect strong growth in Europe in the third quarter.
However, the coronavirus pandemic is also on the rise again in the United States. The number of new infections every day rose again to an average of 70,000, on Wednesday it was 79,000 The first cities have already issued new corona requirements. Therefore, Capital Economics analyst Paul Ashworth warned that growth in the fourth quarter is likely to be weaker again. Expect an increase of 4.5 percent for the months of October through December.
The announcement of the growth data a few days before the US election immediately became a political issue: “The biggest and best in the history of our country by far,” President Donald Trump wrote on Twitter. “Next year will be fantastic,” Trump promised. He was “so happy” that the numbers came out before the election. Trump is currently behind his challenger Joe Biden in the polls. For Trump, the growth data is proof that he has pulled the economy out of the Corona crisis well and that a record year is looming.
However, the Federal Reserve (Fed) warns that the development of the economy now depends on the virus. The Fed expects economic output to decline 3.7 percent in 2020, corresponding to a severe recession.
According to data from Johns Hopkins University, there are nearly 8.9 million confirmed coronavirus infections in the country of 330 million people. More than 227,000 infected people have died so far, more than in any other country in the world.
Biden accuses Trump of having given up on the fight against the pandemic and being responsible for the deaths of tens of thousands of Americans. “President Trump does not yet have any plans for our country to overcome this crisis and move forward,” Biden said Thursday. He and his Republicans have also prevented another stimulus package for those in need, Biden said. Too many Americans were not benefiting from the growth, he complained.
Trump, on the other hand, promises voters a quick rebound. Call for the Corona requirements to be ended so the economy can continue to grow. Biden, on the other hand, emphasizes that containing the pandemic is a prerequisite for sustainable growth. Biden also does not rule out reimposing extensive crown requirements, if the infection situation requires it. When appearing in front of his supporters, Trump uses this formula: “It’s a choice between a Trump boom and a Biden blockade.”
In the first quarter, as a result of the pandemic, GDP plummeted a projected 31.4 percent for the year, representing a 9 percent decrease compared to the previous quarter. It was the sharpest economic recession ever recorded.
The job market had also brutally collapsed. The unemployment rate soared to almost 15 percent in April, the highest level on record. In September it fell to 7.9 percent. Before the pandemic, the rate was 3.5 percent, the lowest level in decades.
As a result of the Crown crisis, around 751,000 people filed an initial application for unemployment benefits in the week to October 24, some 40,000 less than the previous week, the Labor Ministry announced on Thursday. The new applications reflect the short-term development of the labor market. Immediately before the corona pandemic, the number used to be around 200,000 a week.