The US economy grew at a staggering 33.1% annual rate during the July-September quarter – by far the largest quarterly gain on record – rebounding from an epic plunge in the spring, when the coronavirus outbreak took hold. closed businesses and threw tens of millions of people out of work.
Yet the recovery from the deepest recession since the Great Depression of the 1930s is far from complete. The Commerce Department’s Thursday estimate of third-quarter growth recovered only about two-thirds of the output lost at the start of this year when the economy essentially froze as security orders forced the restaurants, bars and many retailers to close.
The economy is weakening again and facing new threats. Confirmed viral cases are booming. Hiring sagged. Government stimulus is exhausted. With no further federal aid in sight this year, Goldman Sachs has cut its growth forecast for the current fourth quarter to an annual rate of 3% from 6%.
“We have a pretty harmful brew that is developing with the intensification of the pandemic, the absence of any other government stimulus and signs that the economy is already slowing down quite significantly,” said Mark Zandi, chief economist. at Moody’s Analytics.
Thursday’s GDP growth estimate is the last major economic report before election day, following a campaign President Donald Trump has sought to build around his economic record before the pandemic strikes. Trump has attracted generally strong public support for his management of the economy.
Although the unemployment rate, at 7.9%, is down significantly from 14.7% at the start of the pandemic recession, it remains historically high. And hiring has slowed for three consecutive months. The economy still lacks around 10.7 million jobs to recover the 22 million jobs lost due to the pandemic.