The US economy grew by 33.1 per cent in the third-quarter of this year, indicating a revival of the economy from affects of the coronavirus pandemic.
President Donald Trump, who is seeking re-election for a second four-year term, has welcomed the latest GDP estimates released by the US Department of Commerce on Thursday.
Real Gross Domestic Product (GDP) increased at an annual rate of 33.1 per cent in the third quarter of 2020, according to the “advance” estimate released by the Bureau of Economic Analysis.
In the second quarter, real GDP decreased 31.4 per cent, an official release from the Department of Commerce read.
Soon after the report was made public, Trump tweeted: “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,” he said.
Democratic presidential nominee and former vice president Joe Biden said the report underlined three truths about the present economy.
“We are in a deep hole and President Trump’s failure to act has meant that Q3 growth wasn’t nearly enough to get us out; the recovery is slowing if not stalling; and the recovery that is happening is helping those at the top, but leaving tens of millions of working families and small businesses behind,” he said.
“And with no plan to convene Congress to get a deal done to get economic relief to those who badly need it and his White House admitting they have given up on trying to get the virus under control, President Trump still has no plan to get our country through this crisis and move us forward,” Biden said.
The Trump Campaign said the latest GDP report has proven the success of Trump’s America-first policies.
“Joe Biden spent 47 years in Washington shipping factory jobs overseas and selling out to China. President Trump has defended American jobs and brought economic success back to our country,” the campaign said.
“America’s hardworking men and women form the backbone of this country and, with President Trump, they will always have an ally in the White House. The Trump Campaign’s new advertisement “Backbone” highlights President Trump’s economic record of promises made, promises kept and will air on network cable and local broadcast across the country,” it said.
The Department of Commerce said the increase in third quarter GDP reflected continued efforts to reopen businesses and resume activities that were postponed or restricted due to Covid-19.
“The full economic effects of the COVID-19 pandemic cannot be quantified in the GDP estimate for the third quarter of 2020 because the impacts are generally embedded in source data and cannot be separately identified,” it said.
According to the Department of Commerce, the increase in real GDP reflected increases in personal consumption expenditures (PCE), private inventory investment, exports, nonresidential fixed investment, and residential fixed investment that were partly offset by decreases in federal government spending (reflecting fewer fees paid to administer the paycheck protection programme loans) and state and local government spending.
Imports, which are a subtraction in the calculation of GDP, increased.
Senate Democratic Leader Chuck Schumer said that the GDP report provides some good news and some bad news.
“The good news is that the assistance provided in the CARES Act, secured by Senate Democrats, accounts for a large percentage of the GDP growth in the third quarter, helped stabilise our economy and has begun to propel our nation’s recovery,” he said.
The CARES Act provides fast and direct economic assistance for American workers and families, small businesses, and preserves jobs for American industries.
“The bad news is, President Trump and Senate Republicans have stymied what could have been a much more robust recovery by allowing much of the assistance in the CARES Act to expire and by refusing to provide additional support to millions of American families. Had Republicans joined us in supporting a second robust and bold relief package, the second half of 2020’s recovery would be much stronger than it is anticipated to be,” Schumer added.
“Everyday Americans are still hurting and even with third quarter GDP growth as reported today, we’ve lost USD 600 billion of economic output and our economy will still be down more than 3.5 per cent from where we were at the end of 2019,” he said.