After a drastic drop in the second quarter, the U.S. economy picking up in the third quarter, posting its fastest recovery ever, although still significantly lower than usual.
The U.S. Commerce Department reported on Thursday that the United States’ real gross domestic product (GDP) increased by 33.1 percent in the third quarter. This was a sharp increase after the GDP fell 31.4 percent in the last quarter due to pandemic concerns.
According to the Commerce Department’s report, the third quarter increase was the result of “continued efforts to reopen businesses and resume activities that were postponed or restricted due to COVID-19.” Within the GDP increase, the department noted increases in personal consumption expenditures, private inventory investment, exports, nonresidential fixed investment, and residential fixed investment.
The current-dollar GDP for the third quarter increased 38 percent, or $1.64 trillion, to a total of $21.6 trillion. The previous quarter saw the current-dollar GDP fall $2.04 trillion, or 32.8 percent.
While the GDP picked up, current dollar personal income decreased in the third quarter. The personal income level decreased by $540.6 billion, which the department attributed to a “decrease in personal current transfer receipts,” including government social benefits connected to pandemic relief programs. Disposable personal income also decreased, falling by 13.2 percent or $636.7 billion. Real disposable income decreased by 16.3 percent.
This is the last economic report the U.S. Department of Commerce has scheduled before the Nov. 3 election. (However, there is a Personal Income and Outlays report for September 2020 set to be released on Oct. 30.) A second estimate for 2020’s third quarter gross domestic product will be released on Nov. 25.
However, the U.S. is still technically in a recession. The National Bureau of Economic Research declared that the nation entered a recession in February 2020 as a result of the COVID-19 pandemic.
Across the United States, the unemployment rate was 7.9 percent in September 2020. While the number was the lowest rate in months approximately five months and a significant decrease from the high of 14.7 percent in April, it is still more than 3 percent higher than the unemployment rate of 4.4 percent reported in March 2020.