by WorldTribune Staff, October 29, 2020
“We’re coming back, and we’re coming back strong,” President Donald Trump said on Thursday as the Bureau of Economic Analysis reported that U.S. Gross Domestic Product (GDP) grew by 7.4 percent in the third quarter, the largest single quarter of economic growth on record.
Trump tweeted on Thursday: “GDP number just announced. Biggest and Best in the History of our Country, and not even close. Next year will be FANTASTIC!!! However, Sleepy Joe Biden and his proposed record setting tax increase would kill it all. So glad this great GDP number came out before November 3rd.”
While Trump continues to stress optimism on the campaign trail, saying “next year will be even better,” Democrat presidential candidate Joe Biden has predicted a “Dark Winter” for the country. If elected, Biden would immediately raise all Americans’ taxes and stifle small business growth with a myriad of regulations.
Meanwhile, those who continue to suffer due to coronavirus lockdown orders will likely not see additional relief before the Nov. 3 election as critics say House Speaker Nancy Pelosi is holding up a new stimulus package to avoid giving Trump a victory prior to the election.
White House economic adviser Larry Kudlow told Fox News on Thursday that Pelosi was “stringing us along” and “going to hold up key assistance like the [Paycheck Protection Program], small business assistance and unemployment assistance.”
The Council of Economic Advisers detailed the record-setting quarter:
• The Bureau of Economic Analysis (BEA) estimates that real GDP grew 7.4 percent (33.1 percent at an annual rate) in the third quarter of 2020, above market expectations.
• This is the largest single quarter of economic growth on record and roughly twice the prior record of 3.9 percent (16.7 percent at an annual rate) set in the first quarter of 1950.
• This follows the sharpest single quarter economic contraction on record in the second quarter of 2020 due to pandemic-induced lockdowns.
• The United States in a single quarter has now recovered two-thirds of the economic output lost due to the pandemic during the first half of the year. In the recovery from the 2008-09 recession, it took 4 times as long to regain the same share of lost economic output.
• The third quarter growth rate is also 4 times greater than the April Blue Chip consensus forecast and is nearly twice the rate projected by the Congressional Budget Office (CBO) in July.
• Real consumer spending rose 8.9 percent (40.7 percent at an annual rate) in the third quarter, the largest quarterly increase on record. Both goods and services experienced steep increases.
• Consumer spending accounted for roughly three quarters of overall real GDP growth in the third quarter, partly reflecting both the reopening of America’s businesses and the confidence of consumers to spend on goods and services once more.
• Greater third quarter spending on recreation, food, and accommodation services – sectors acutely impacted by lockdowns – alone accounted for one fifth of total GDP growth in the third quarter.
• Residential investment skyrocketed 12.3 percent (59.3 percent at an annual rate), with most of the increase due to real estate commissions reflecting a rebound in home sales. The increase in residential investment was the largest since 1983.
• Business investment rose 4.7 percent (20.3 percent at an annual rate), with a steep increase in equipment more than offsetting declines in structures and intellectual property products.
The Strength of the Pre-COVID Economy
• Prior to the pandemic, the United States under President Trump had the highest GDP growth rate among the G7 countries – with growth more than double the G7 average from when the President took office through the end of 2019.
• The pandemic has hit every economy around the world, though we performed better than our peers having experienced the least severe economic contraction of any major Western economy. Europe’s (Euro Area) contraction was in fact 1.5 times as severe as the United States’.
• In President Trump’s first 3 years in office, the economy grew by $310 billion (1.2%) more than what was expected prior to the 2016 election. In contrast, in Obama-Biden’s second term, the economy grew by $640 billion (26%) less than what was expected prior to the 2012 election.
“The strong foundation of the pre-pandemic economy and the efficacy of the Trump administration’s efforts to provide direct economic aid to families and small businesses helped deliver record-setting growth that few predicted would occur earlier this year. Our nation’s economy is poised for continued expansion in the fourth quarter, and the strength of the recovery thus far is a testament to the fortitude and resilience of America’s workers and families,” the White House statement said.
“The president built the world’s best economy once and he’s rapidly doing it again,” Trump 2020 communications director Tim Murtaugh said in a statement.