Impressive recovery of US GDP but with questions about the future

It was news that Donald Trump wanted to announce for a long time, but it probably came too close to election day to be able to reverse the correlations on its own. The US economy in the third quarter of 2020 grew at a rate of 7.4% compared to the previous quarter and by 33.1% on an annual basis, covering about two thirds of the economic decline recorded in the first two quarters that coincided with the great first peak of the pandemic, when a contraction of 5% in the first quarter and 31.4% in the second quarter, always on an annual basis. This growth potential is the highest recorded in the US since 1947. We have to go to 1950 to see growth rates recorded, on an annual basis of 16.7%. However, US GDP remained 2.9% below the level of the corresponding quarter of 2019 and 3.5% below the level it was at the end of last year, which shows how high the initial The news added to the news that the number of workers applying for unemployment benefits fell by 40,000 to 750,000, the lowest level since the pandemic began. In September, the US recovered about half of the 22 million jobs lost in March and April at the start of the pandemic. What fueled the recovery? After all, space with a big decline in the first two quarters, but also private consumption, business supplies and to a lesser extent private investment. However, economists point out that US GDP will not return to the levels it was before the new year. from the pandemic and that eventually the year will end for the US with a recession of 3.6%. Much will depend on the duration of the pandemic, with the second wave hitting both Europe and North America, as well as the possibility of new restrictive measures. The tone given by the market representatives is for a stabilization of the economy, but at a lower level than in the corresponding period last year. For example, payments by credit and debit cards are at levels 5.1% lower than in the corresponding period of 2019. On the other hand, government measures and money given to businesses and employees and the unemployed fueled consumer spending in the third quarter , which increased on an annual basis by 40.7%. Particularly large was the increase in consumer durables, which increased by 82.2%, which refers to increased car markets such as cars, furniture and home equipment for entertainment and sports. At the same time, the partial opening of social life allowed greater consumption of services, such as health or travel. The business investment increased by 20.3%, as did the purchase of equipment with the exception of equipment for the oil and gas sector. The home industry also continued to decline due to restrictions on the fullness of stores. The difficult future It is not at all certain that the same impressive growth rates will continue. To a large extent, the increase in consumption and investment was a result of the large state financial support packages that had preceded it. Without a similar package for the fourth quarter, it is not at all a given that there can be similar growth rates, which explains the great charge in the political controversy for a new large package of state support. At the same time, the expansion of the pandemic raises the question of new restrictive measures, which will also have a negative impact on consumption, or on lifestyle changes that will also reinforce trends of economic contraction. In addition, several industries in the US will feel the effects of the recession in other parts of the world, such as Europe, with European governments entering a new round of major restrictive measures. One way or another, a pandemic that continues with the current intensity for a long time and with cycles of restrictive measures until the spring will have a significant economic impact, in the sectors to which restrictive measures are applied but also in the economy as a whole. In the US economy, the US economy will be clearly below pre-pandemic potential and beyond this year’s final annual recession, it will take some time to return to pre-pandemic data. A new major economic stimulus package could bring significant effects, at least in terms of rising consumption, although the structural problems of the US economy, pre-existing and pandemic, will continue to be active. Follow it on Google News and be the first to know all the news See all the latest News from Greece and the World, at

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