The United States' real gross domestic product (GDP) grew at an annual rate of 33.1 per cent and 7.4 per cent sequentially in the third quarter of 2020, signaling a rebound of the economy from impacts of the coronavirus pandemic. In the second quarter, US real GDP contracted by 31.4 per cent (9 per cent at a quarterly rate), marking lowest economic growth since the government started keeping records in 1947, according to the second estimate released by the Bureau of Economic Analysis on Wednesday.
"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 US Commerce Department said.
The overall rise in the GDP remained unrevised from its first estimate, although some components were revised. Personal consumption expenditures (PCE), private inventory investment, exports, non-residential fixed investment, and residential fixed investment were revised upward, while state and local government spending were downgraded.
The PCE index, a measure of consumer spending, increased 3.7 per cent, in contrast to a decrease of 1.6 per cent, reflecting increase in services (led by healthcare as well as food services and accommodations) and goods (led by clothing and footwear as well as motor vehicles and parts).
The growth estimates for the fourth quarter has been pegged below 5 per cent at annualised rate. Recently, Goldman Sachs cut its US growth forecasts for fourth quarter to 3.5 per cent from 4.5 per cent and that of first quarter of 2021 to 1 per cent as compared to 3.5 per cent projected earlier, citing the "rapid and broad-based resurgence of the coronavirus".
On impact of COVID-19, the US commerce department said that the full economic effects of the 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 ascertained separately.
Current-dollar GDP increased 38 per cent at an annual rate, or $1.64 trillion, in the third quarter to a level of $21.16 trillion as compared to sharp contraction of 32.8 per cent, or $2.04 trillion in the second quarter.
Real gross domestic income (GDI) increased 25.5 percent in the third quarter, in contrast to a decrease of 32.6 per cent (revised) in the second quarter. The average of real GDP and real GDI, a supplemental measure of the US economic activity that equally weights GDP and GDI, increased 29.2 per cent in the third quarter as compared to a decrease of 32 per cent (revised) in the previous quarter.