Send me real-time posts from this site at my email
Motley Fool

GDP Grows at Record 33.1% in Q3, but Questions Remain About a Coronavirus Rebound.

After the extreme decline of 31.4% in gross domestic product (GDP) that the U.S. economy experienced in the second quarter, the bounce back produced the largest economic surge ever for the third quarter at 33.1%. Estimates had expected GDP of 32%, but this growth is largely caused by the pandemic, rather than traditional economic growth. When you shut down the economy, the reopening will be quite a big number.

Within the economic data, the biggest surprise was personal consumption, which increased by 40.7%, compared to estimates of 38.9%. The market reacted softly to the news, with the S&P 500 up just under 1% this morning.

Image source: Getty Images

It's important to remember that the GDP figure represents more of a return to normal, rather than a gain. The country is still facing an uncertain economic situation heading into the end of the year. Surges in COVID-19 cases are putting fear into the market and, more importantly, continued pressure on the underlying businesses within the economy.

The number of jobless claims were lower than expectations for last week. Still, initial jobless claims were 751,000 for the week ended Oct. 24. While these claims have progressively declined since April, they are still well above pre-COVID numbers. Looking ahead, this will be an important metric to monitor.

For the fourth quarter, a resolution on further stimulus will likely be the key factor in economic developments. The stock market has been weary as stimulus talks have waned. The only thing that holds more sway at the moment is whether COVID-19 cases escalate to levels forcing further social-distancing measures. Another labor shock would change the discussion entirely.

10 stocks we like better than Walmart
When investing geniuses David and Tom Gardner have an investing tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Walmart wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

Stock Advisor returns as of 2/1/20

The Motley Fool has a disclosure policy.


Source

Popular posts

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue