Economy Expands at Record Pace Following Historic Covid Decline – By Michael Rainey (The Fiscal Times) / Oct 29 2020
The U.S. economy grew at an unprecedented 7.4% pace from the second to the third quarter, the Commerce Department announced Thursday. On an annualized basis, the growth rate was 33.1% — the highest annualized growth rate on record.
The historic growth came on the heels of an equally historic decline the previous quarter, when the economy shrank by 9.1%, or 31.4% on an annualized basis, as businesses closed their doors and people stayed home amid the Covid-19 pandemic.
Although the latest numbers are undoubtedly positive, they come with lots of caveats, as economists took great pains to explain Thursday. Some important points to consider:
The U.S. economy is still in a deep hole: Gross domestic product is still about 3.5% below the level recorded in the fourth quarter of 2019, the last reporting period before the coronavirus pandemic hit, Daniel Vernazza, chief economist at UniCredit Bank, said in a note Thursday.
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