Q3 2020 GDP Growth +33.1%

This morning’s Q3 GDP growth report was one for the record books. According to the government’s data, the U.S. economy grew at a 33.1% rate for the third quarter. Wall Street had been expecting 32%.

That’s not just the best number in the current data series, which goes back over 70 years, but it’s nearly double the next-best quarter.

A few notes about today’s report. That’s an annualized figure. It’s also adjusted for inflation.

The reason for the strong growth is obviously due to the snap back of the economy being re-opened after the lockdown in Q2. The economy shrank at a 31.4% rate in Q2. We also fell 5.0% in Q1, which was only partially impacted by the lockdown.

(Some folks at Twitter got very, very angry at me for passing along this number. As always, don’t let your politics interfere with your analysis.)

The simple takeaway is that we’ve come a long way from the low, but we still have a long way to go to get to where we were.

This morning’s initial claims report came in at 751,000. That’s a little better than I had been expecting. Wall Street had been expecting 778,000. The claims reports seemed to have stalled a few weeks ago, but now we’re seeing some improvement.

Thursday’s data brought the four-week moving average for initial claims down to 787,750 from 812,250, the Labor Department said. Continuing jobless claims, which include those receiving unemployment benefits for at least two straight weeks, dropped by 709,000 to 7.75 million for during the week of Oct. 17. Data on continuing jobless claims is delayed by one week.

Posted by on October 29th, 2020 at 12:18 pm


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