US GDP Soars in Q3

Are we back? The US economy soared 33.1% in the third quarter, a record rate of growth and much better than economists predicted. Still pundits note that GDP did not grow by a third in Q3…just as it didn't fall by 36% in Q2. Looking at the quarterly data alone, GDP grew 7.4% from the second to the third quarter, compared with a 9% decline between the first and second quarter.

Despite the Q3 jump, the US economy remains about 3.5% smaller than a year ago. That's because GDP fell 1.3% in Q1 and 9.0% in Q2.

The Committee for a Responsible Federal Budget noted even the actual 7.4% growth rate in some ways overstates economic performance. Because the economy is smaller now than it was in the beginning of the year, it would take an 11.3% increase in output to offset the 10.1 percent reduction between the end of 2019 and the second quarter of 2020.