The United States economy made history in the third fiscal quarter of 2020 when gross domestic product jumped at a record rate, signifying a resurgence in the economy following a depletion during COVID-19 lockdowns.
Data shows this jump is the largest output gain since the 1940s when the government began to track GDP data.
GDP for the third quarter, which is measured as the total goods and services produced from July to September, rose at a seasonally adjusted annual rate of 33.1 percent, according to the U.S. Department of Commerce‘s Bureau of Economic Analysis.
This rebound is a drastic contrast to the 31.4 percent decrease in real GDP during the second quarter, following the 9 percent decline from the first to the second quarter, and a 7.4 percent increase from the second to the third quarter.
This surprising and historical economic growth, the BEA report released on Thursday states, was spurred by increases in “consumer spending, inventory investment, exports, business investment, and housing investment that were partially offset by a decrease in government spending,” on both the federal and state level.
Despite fears that economic recovery from the pandemic would be difficult, this drastic GDP growth reflects a return in consumer activities such as shopping and eating out at restaurants or bars as more states and cities begin to open up from government-mandated lockdowns due to coronavirus, resulting in personal consumption increasing 40.7 percent, gross private domestic investment increasing 83 percent, and residential investments increasing 59.3 percent.
President Donald Trump celebrated the GDP growth, noting that Democratic Presidential Nominee Joe Biden’s policies would have the opposite effect if elected.
“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,” Trump tweeted.
Donald Trump Jr. also praised the growth on Twitter writing, “The great American come back is real, don’t let Joe Biden and the Democrats destroy it with their ridiculous tax policies and regulations.”
“Let’s fight for American jobs and American livelihoods,” he added.
🚨🚨🚨 33.1% GDP growth. Highest ever.
The great American come back is real, don’t let Joe Biden and the Democrats destroy it with their ridiculous tax policies and regulations. Let’s fight for American jobs and American livelihoods.
— Donald Trump Jr. (@DonaldJTrumpJr) October 29, 2020
While current-dollar personal income (CPI), disposable personal income, and real disposable personal income all decreased in the third quarter, the report notes that this is partially due to the ending of “government social benefits related to pandemic relief programs,” or the expiration of the C.A.R.E.S. Act, and “was partly offset by increases in compensation and proprietors’ income.”
This historic GDP growth matches the rates seen in September when unemployment dropped from 8.4 percent to 7.9 percent after 661,000 new jobs were added during the U.S.’s pandemic economic recovery.