Coming out of the worst quarter in history, the US economy grew at its fastest pace in the third quarter as a nation battered by an unprecedented pandemic began to reunite.
Third-quarter gross domestic product, a measure of total goods and services produced between July and September, rose 33.1% year-on-year, the trade ministry said in an initial estimate on Thursday.
Markets responded positively to the news, with Wall Street already looking at a flat to slightly positive opening.
This came after a drop of 31
Increased consumption, along with sold profits from business and housing investment, as well as exports, boosted the recovery in the third quarter. Reduction of government spending after the expiration of the Rescue Financing Care Act, subtracted from GDP.
The strong growth rate came after governments across the country shut down major activities in a bid to stem the spread of Covid-19, which the World Health Organization declared a pandemic on March 11.
Since then, about 228,000 American lives have been lost to the virus, which has infected nearly 9 million. The economy has been in a technical recession since February, as growth slowed by 5% in the first quarter.
The growth for the third quarter occurred against the background of a revival of consumer activity, which represents about two thirds of GDP. Although most of the country remains cautiously open, shoppers are beginning to return to the shops, and the bar and restaurant industry is entering the first lukewarm phase of business resumption despite capacity constraints.
Economic activity has been strong in the real estate sector, and surveys of consumers and CEOs have shown that confidence remains high for the future, despite the obstacles associated with the virus.
Personal income fell sharply for the quarter as transfer payments from coronavirus relief efforts dissipated. Personal savings also declined, but remained strong at 15.8%, down from a record 25.7% in Q2.
This is current news. Please check here again for updates.