Thursday October 29, 2020
In the spring, the US economy collapses to an unprecedented degree. The easing in the summer will then be on the up again just as clearly. This predominantly statistical effect is likely to play an important role in the last few meters of the election campaign.
After the economic slump due to the Corona crisis in the second quarter, the US economy grew strongly in the third quarter. The gross domestic product (GDP) rose from July to September for the year by 33.1 percent, as the US government announced in an initial estimate. Converted to the usual approach in Europe, this would correspond to an increase of around 7.4 percent compared to the previous quarter.
The data shows the recovery of the US economy after widespread public shutdowns due to the pandemic in the second quarter. In part, the impressive numbers are also an effect of the statistics: Compared to the devastating second quarter, the growth looks impressive. In absolute numbers, annual economic output would now amount to $ 21.15 trillion. That would be slightly lower than the figure of $ 21.56 trillion calculated in the first quarter, i.e. before the pandemic.
In the first quarter, as a result of the lockdowns, GDP slumped by 31.4 percent projected for the year, which corresponded to a minus of 9 percent compared to the previous quarter. That was the sharpest economic slump on record. The job market was also badly shaken. The unemployment rate soared to almost 15 percent in April, also the highest level since records began. By September it sank again to 7.9 percent. Before the pandemic, the rate was 3.5 percent, the lowest level in decades.
Good news for the final spurt of the election campaign?
The announcement of the data a few days before the US election should immediately become a political issue: President Donald Trump, who is running for a second term on Tuesday, had already promised his supporters record growth during the election campaign. Trump is currently behind in polls. He is now likely to cite the growth data as proof that he has brought the economy through the Corona crisis well.
However, the US Federal Reserve warns that the development of the economy is now dependent on the virus. The Fed expects economic output to decline by 3.7 percent for the Gessmt – which corresponds to a severe recession.
With regard to the pandemic, things are looking rather bad: The number of new infections every day has recently risen to around 70,000 on average, and the trend is rising. On Wednesday yesterday there were 79,000. More than 227,000 infected people have died so far – more than in any other country in the world. Trump’s Democratic challenger Joe Biden accuses the Republican of surrendering in the fight against the pandemic and being responsible for the deaths of tens of thousands of Americans.
Trump promises voters a quick upturn. He calls for an end to the Corona requirements so that the economy can continue to grow. Biden, on the other hand, emphasizes that containing the pandemic is a prerequisite for sustainable growth. Biden also does not rule out the re-imposition of extensive corona requirements, if the infection situation should require it.