US economy rebounds in the third quarter

“It’s the economy, stupid”, (“It’s the economy, idiot”), had whispered an advisor to Bill Clinton to explain the victory of his champion, in 1992, against George Bush Sr. entangled in a recession. If this is the case, Donald Trump’s chances of winning the presidential election on Tuesday, November 3, are much higher than those given to him for the moment by the polls (only 11% chance according to the reference site FiveThirtyEight). Because the US economy rebounded very strongly in the third quarter, according to the first estimates released Thursday, October 29 by the Department of Commerce. Indeed, the growth of the gross domestic product (GDP) reached 33.1% year-on-year in the third quarter, after a fall of 31.4% in the second quarter. Looking at quarterly figures, the economy grew 7.4% from the previous quarter, after falling 9% in the second quarter.

Compared with 2019, third-quarter GDP remains 2.9% lower. In total, according to the forecasts of Wall Street Journal, the recession for the year 2020 should be 3.5% – in France it should be 10%. However, the rebound in the economy is expected to slow due to the persistence of the coronavirus epidemic.

Resumption of consumption

As for jobs, America had recreated, at the end of September, half of the 22 million “Jobs” that it had destroyed in March and April, when the activity had been stopped. The unemployment rate fell to 7.9%. It is expected to decline again in October, with jobless claims for the week ended October 24, 751,000, down 40,000. This figure is high, but it is the lowest since mid-March. These October employment figures will not be known until after the election.

Donald Trump immediately welcomed the growth index on Twitter. “The GDP figure has just been announced. The biggest and the best in the history of our country, and not even close. Next year will be FANTASTIC !!! However, Sleepy Joe Biden and his proposal for a record tax hike would kill it all. I am so happy that this big GDP figure came out before November 3rd ”, wrote the outgoing president.

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The good performance of the economy is explained by the recovery in consumption (up 40% year-on-year) and in particular in services and durable goods (82%). America has also resisted thanks to the power of high-tech, and the crisis has allowed a major digital shift. This transition has been made at the expense of small businesses and at the cost of uncontrolled management of the Covid-19 epidemic, which has claimed more than 220,000 victims. Donald Trump, in the October 22 debate, accused Joe Biden, who focuses his entire campaign on the mismanagement of the pandemic by his opponent, of wanting to stop the activity, against the will of the population. “We are learning to live with it. We do not have the choice. We cannot lock ourselves in a basement like Joe Biden does ”, he blurted out.

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