The U.S. economy expanded a record 7.4% during the third quarter of 2020 and has recovered two-thirds of the ground lost during the first half of the year, according to The Washington Post.
For the economy to recover all that was lost in the second quarter, third-quarter GDP would have had to surge by 10%. Economists are wary about the growth as the U.S. is entering a period of rising COVID-19 cases.
The third-quarter GDP estimates showed a rise in investment on new homes, as well as household goods such as furniture, equipment, renovations and home offices. Additionally, economists expected strong gains in manufacturing, which reportedly has more than made up for pandemic-era losses. Health care spending increased 18% as people felt safer rescheduling routine appointments and surgeries. Purchases of new cars and parts soared 17%; furnishings and durable household equipment grew by 12.6%; and sales of clothing and footwear surged 27.2%.
Recessions are traditionally defined by a significant decline in economic activity across the whole economy for two consecutive quarters. The National Bureau of Economic Research has said the economy officially fell into a recession in February, but it will take some time before the bureau officially says when the recession has ended.
About 23 million Americans still are on some form of unemployment benefits, and the number of new weekly jobless claims remains high seven months into the COVID-19 pandemic. The number of people who have fallen into poverty has grown by 8 million since May, and for many businesses that have not yet reopened, furloughs are leading to permanent layoffs.
