The US Economy Regains Momentum As The Real GDP Raised By 33.1 Percent In Q3 Of 2020
After seeing a record decline by 31.4% in the Q2 of 2020, the real Gross Domestic Product of America rises at an annual rate of 33.1% in the third quarter of 2020.
We can never stress enough the damages that the coronavirus pandemic inflicted on the world and its various economies. The pandemic that has been afflicting us for the past eleven months put so many things and word affairs on halt. Sadly, with the disease’s rise again, the pandemic is ready to damage whatever was left.
However, the US economy is reflective of all the changes that the pandemic brought on.
In the first quarter of 2020, the Gross Domestic Product or GDP dropped at an annual rate of 5%. But when the pandemic ensued global lockdowns in the second quarter of 2020, and when the offices had to shut down, the businesses faced a major blow, and the US economy saw a record decline of GDP at an annual rate of 31.4% as per the statistics that were released by the US. Bureau of Economic Analysis.
Now, this was a major blow and many companies had to lay off millions of employees all over the world. All the states in America faced the same fate, with the percentage change in GDP ranging from – 20.4% in the District of Columbia to – 42.2% in Nevada and Hawaii.
However, once the lockdowns softened and a slight control over the pandemic situation was achieved, the third quarter had begun. At the end of October 2020, there was an advance estimated GDP report released, and as per the predictions, the US economy saw a surge during the July-September window which marks the third quarter of this year. Since many businesses and industries had resumed their functions to some extent and the world tried to rise back on its feet, the US GDP saw a record quarterly growth at an annual rate of 33.1%.
Now, this is quite amazing, but this happiness can be very short-lived too. Because the incidence of COVID-19 cases is again rising and there are chances that the booming and rejuvenating energies and growth of industries and businesses will slow down again.
The GDP rise at the annual rate of 33.1% is the first most drastic and dramatic quarterly resurgence ever after 1947
The US Commerce Department has reported that the first advance estimated report was right and the overall GDP and America’s total output of services and consumer goods has remained as it is. There were only slight ramifications and revisions that had to be made in the final report.
As COVID-related assistance programs and recovery payments from the federal economy declined, Personal Income also decreased by 0.7%. However, consumer spending rose by 0.5% in October 2020.
Other investment gains, business profits, housing, and exports were also offset by the declining trends in state and local government spending.
In terms of international transactions, the US economy faced a deficit of almost $111.5 billion. In the second quarter, the deficit was found to be around 3.5% of the current dollar GDP, which was slightly up as compared to the first quarter. So, in Q2, the account deficit had increased from $59.0 billion to almost $170 billion.
On the other hand, the US international trade on monthly basis saw a decrease in deficit in September. In August, this deficit was around $67 billion, but in September, it was noted to be around $64 billion. This happened because of an increase in export instead of imports.
The goods deficit also decreased by almost $3 billion in September. However, the services surplus saw a rise and was noted to be around $16 billion.
These are just a few stats to highlight the high points and the low points of the third quarter of 2020 in comparison to the previous quarters. Now, although the GDP has surged, experts are worried that the pandemic’s current wave before the release of the vaccine is going to affect the economy again, and it is quite possible that the first quarter of 2021 may also see the GDP in negative values again.