In this news, we discuss the Best of times, or the worst? A voter’s guide to U.S. GDP.
(Reuters) – When accountants at the Federal Bureau of Economic Analysis released the latest U.S. gross domestic product report on Thursday, it was perhaps the most controversial economic data since measuring output broadly productive became widely used in the 1940s.
Republicans will point to record-breaking scorecard as proof that President Donald Trump is working wonders to get the US economy back on its feet after the beating caused by the COVID-19 pandemic; Democrats backing their party’s challenger Joe Biden will retort that this shows Trump is ruining the country’s future.
For a chart on A rebound, not yet a recovery A rebound, not yet a recovery:
This is already happening.
The Trump campaign of the past few days briefly unfolded Facebook ads that tout the never-before-seen GDP numbers, pre-loading them into the system’s Facebook before the social media company’s Tuesday deadline for election news announcements. The strategy gives the campaign the flexibility to use the ads during the remainder of the election period.
Some advertisements celebrated the “BEST GDP NUMBERS IN HISTORY”. Others said “THIRD QUARTER GROWTH was MORE than double the previous RECORD”.
Not so fast, said Biden campaign spokesman Andrew Bates. “Due to Donald Trump’s persistent and inexplicable refusal to dwell and take the pandemic seriously – as well as his priority of costing millions of dollars for their health care rather than providing COVID relief funds whose The need is dire – our economy is stagnating right now as layoffs rise and infections rise, ”he told Reuters.
No one disputes that the economy will show record growth in the third quarter, as the extraordinary budget package adopted this spring gave households and those who lost their jobs additional expenses and covered the wage bill and other spending. tens of thousands of businesses.
Lawmakers have yet to approve relief, however, and economists believe those funds have largely disappeared. Meanwhile, other measures of output, including hours worked, show the momentum is already slowing.
DO THE CALCULATION
Voters who have only one week left to the November 3 presidential election will have to sort it out for themselves, and the numbers at issue will be unprecedented and require some interpretation.
The only reason, for example, that estimates of the rebound in growth from July to September are so huge is that the decline in the previous two quarters was even larger. In less than six months, the pandemic transformed what had been a savings of $ 21.7 trillion into a savings of $ 19.5 trillion.
With that as a starting point, here are some of the calculations:
An influential Atlanta Fed model estimates that in July, August and September, the US economy grew at an annualized rate of 36.2%. It is a record by far.
It also comes after a record decline in the second quarter of around 31.4%, annualized. At a glance, it looks like the rebound has been bigger than the decline – but it still leaves the economy in a massive hole from what it was before.
All told, if the Atlanta Fed’s third-quarter forecast holds true, the economy will have regained about 70% of the roughly $ 2.2 trillion in lost production this year as the coronavirus pandemic forced consumers to stay at home and businesses to close.
That still leaves production some $ 660 billion less than it started in 2020.
By comparison, during the worst time of the Great Recession, the economy shrank by about $ 450 billion.
So, in fact, the report will show that the US economy has never done better over a three month period of its modern history. But it will also illustrate how deeply entrenched it is compared to before the crisis and the last time the US economy was in deep recession.
And now, as coronavirus cases continue to soar, that will be one more data voters want to weigh when deciding whether Trump or Biden is best positioned to capitalize on the rebound for a full recovery.
Reporting by Ann Saphir, Elizabeth Culliford, Howard Schneider; Editing by Dan Burns
Original © Thomson Reuters
Originally posted 2020-10-28 11:06:11.