The gross domestic product (GDP) for the third quarter soared at a 33.1% annualized pace, beating all expectations after a sour second quarter.
Consumer activity counts for two-thirds of the GDP. People flocked to stores, bars, restaurants, salons, and other places as the country opened up after a long shutdown due to the coronavirus.
Personal spending went up 40% at an annualized pace. The numbers for real estate and business investment also went up:
The increase in real GDP reflected increases in personal consumption expenditures (PCE), private inventory investment, exports, nonresidential fixed investment, and residential fixed investment that were partly offset by decreases in federal government spending (reflecting fewer fees paid to administer the Paycheck Protection Program loans) and state and local government spending. Imports, which are a subtraction in the calculation of GDP, increased (table 2).The increase in PCE reflected increases in services (led by health care as well as food services and accommodations) and goods (led by motor vehicles and parts as well as clothing and footwear). The increase in private inventory investment primarily reflected an increase in retail trade (led by motor vehicle dealers). The increase in exports primarily reflected an increase in goods (led by automotive vehicles, engines, and parts as well as capital goods). The increase in nonresidential fixed investment primarily reflected an increase in equipment (led by transportation equipment). The increase in residential fixed investment primarily reflected an increase in brokers’ commissions and other ownership transfer costs.Current‑dollar GDP increased 38.0 percent, or $1.64 trillion, in the third quarter to a level of $21.16 trillion. In the second quarter, GDP decreased 32.8 percent, or $2.04 trillion (tables 1 and 3).The price index for gross domestic purchases increased 3.4 percent in the third quarter, in contrast to a decrease of 1.4 percent in the second quarter (table 4). The PCE price index increased 3.7 percent, in contrast to a decrease of 1.6 percent. Excluding food and energy prices, the PCE price index increased 3.5 percent, in contrast to a decrease of 0.8 percent.
The weekly first-time unemployment numbers went down 751,000 from 778,000 the week before.
The continuing jobless claims also went down 709,000 to 7.75 million the week of October 17.
The four-week average for initial claims dropped to 787,750 from 812,250.
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