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What the GDP blowout report really means for Trump



Even if the annualized growth rate of GDP in the third quarter is as high as 35% (although a record high), it will not be able to bring the US economy back to the level at the end of the first quarter. To return the economy to a state where Covid-19 did not sweep the entire country, a bigger leap is needed.

Economists and Wall Street analysts now expect growth in the fourth quarter and the beginning of next year to be much slower than previously expected, because by the end of the summer, about $4 trillion in federal stimulus spending to support consumers and businesses has basically disappear.

If you don’t take into account the numbers on Thursday, it will not tell us the way forward. The surge in new virus cases has led to more restrictions on activities, which could further damage the economy. After a rebound earlier this year, dining and travel activities slipped again. Permanent changes in consumer behavior may also inhibit further recovery.

Trump has repeatedly mentioned that he will get such a huge GDP data before the election, and he will almost certainly brag about it as the best in history. And it̵

7;s almost certain.

But it will also follow the same historic 31% decline in the second quarter. Since the third quarter started from such a low base, even if the growth was slightly higher than the 31% decline, it would not restore economic activity to the level at the end of the first quarter.

Ian Shepardson, chief economist of Pantheon Macroeconomics, said: “From a digital point of view, you need to grow 46% in the third quarter to get back to where you were.” To the level without Covid-19, it will increase by 63%.

Sheppardson said: “From a more substantive point of view, these figures tell you that fiscal policy is feasible.” “The federal government borrowed a lot of money and sent it to individuals and businesses. It worked. Now that we don’t have these things, the growth in the fourth quarter can be expected to be much weaker, and the virus situation is already worse. We are in danger of falling into the abyss again.”

Trump faces another problem in terms of employment numbers. He is often proud of record-setting job creation opportunities-more than 11 million in the past few months. In fact, they are record numbers. However, in the early days of the Covid crisis, they lost a record more than 22 million jobs. The United States can only save all these jobs. In bragging about this number, Trump risks keeping out of touch with the more than 23 million Americans who are still in some form of unemployment assistance.

This problem is reflected in Trump’s economic approval data, which was once a clear advantage. Democratic candidate Joe Biden eliminated this advantage and even had a small economic lead in the latest “POLITICO/Morning Consult” poll.

These numbers show that voters will not be moved by juicy headlines. These numbers do not reflect the reality that many Americans are living in, especially those with low incomes who cannot work from home. In many ways, most of the third-quarter figures may be the Haishi Mi Building.

S&P Global’s chief U.S. economist Beth Ann Bovino said in a research report: “GDP may attract a lot of attention.” “But, despite the welcome growth, But we are still far away from home. To return to the pre-crisis GDP level, we need to recover nearly 40% of the $1.85 trillion loss.”

Democrats are ready to refute any Trump who brags about Thursday’s GDP figures.

Don Bayer (D-Va.), vice chairman of the Joint Economic Committee, said: “The main reason why the third quarter seems to be the best on record is that the second quarter is the worst on record.” The committee reported on Wednesday. “Current forecasts estimate that if growth continues at the rate before the pandemic, GDP will be greatly reduced.”


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