Five days before the November election, the United States may report the fastest economic growth on record-but growth data is unlikely to make President Trump fall behind Joe Biden across the country and get the rebound he expected.
Michael Barr, an economist at the University of Michigan, told FOX Business: “I don’t think the GDP figures will have an impact on the election.”
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The data is expected to show that as businesses reopen and consumers return to the market due to the unprecedented closure of the U.S. economy, U.S. GDP in the third quarter will grow at an annual rate of at least 30%.
But the overall figures obscured the overall situation: the economy contracted at an annual correction rate of 31.4% in the last quarter, the biggest decline in modern American history. The Ministry of Commerce calculates GDP on a quarterly basis, as if this level of growth has lasted for a full year; during periods of large fluctuations, it may exaggerate the decline in growth and subsequent rebound.
Since the growth in the third quarter will be compared with the growth in the second quarter (the lowest level in history), any rebound will produce huge growth.
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In April, May and June, the economy decreased by about 9% compared to the previous quarter. According to data from the non-partisan Brookings Institute, even with a 30% growth rate in July, August and September, GDP will still be more than 4% below the level at the end of 2019.
Before the pandemic, the economy was growing at a rate of 2% to 3% per year.
“The economy in the third quarter will still be far below the level before COVID, and even far below that depth. Even after record growth, the depth will still be as deep as a very severe recession, such as the recession in 2008, Michigan University economist Justin Wolfers told FOX Business.
However, Trump has been touting the upcoming report as evidence of a strong “V-shape” recovery from the pandemic.
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Trump told supporters at a campaign rally in Allentown, Pennsylvania on Monday: “Wait until you see this number.” “We have a super V.”
Economists have pointed to other indicators, such as the unemployment rate, which indicate that the country’s reversed trend from the crisis caused by the virus has been stable from late summer to fall. So far, the economy has increased by half of the 22 million jobs caused by the pandemic, and the unemployment rate has remained at a historic high of 7.9%.
Barr said: “We have not recovered from the pandemic. There are still more than 11 million unemployed people in the United States, and there are more discouraged and unemployed people.” “Until our pandemic is controlled, we can recover completely.”
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