DNC on Latest Economic Numbers
October 29, 2020
DNC Chair and former Labor Secretary Tom Perez released the following statement in response to today’s GDP numbers and after another 1.1 million Americans filed initial claims for unemployment last week:
“Our economy is still in a hole nearly as deep as the Great Recession. Another 1.1 million filed for unemployment last week. Small businesses are struggling to survive and thousands of Americans continue to die every week. These are not the signs of an economy that is ‘roaring back,’ as Donald Trump wants us to believe. In fact, we’re headed in the wrong direction; the economy is slowing this quarter because of Trump’s failure to contain the virus or provide additional economic relief. No amount of false platitudes can distract from a simple reality: Our nation is still in crisis, and Donald Trump still doesn’t have a plan to get us out of it. Joe Biden and Kamala Harris know that working families are struggling; they have a bold plan to tackle this pandemic, reenergize our economy, put Americans back to work safely, and build our nation back better.”
The Q3 GDP growth number that Trump is touting is an “optical illusion” and “statistical quirk”—not a sign of recovery.
NBC News: “Trump wants credit for ‘fastest GDP growth in history.’ Here’s a reality check.”
Barron’s: “Third-Quarter GDP Growth Will Look Huge. Don’t Be Deceived.”
New York Times: “Why The Best G.D.P. Report Ever Won’t Mean The Economy Has Healed”
Oxford Economics’ Vanden Houten: “‘The strength of this figure is an optical illusion,’ Nancy Vanden Houten, an economist at Oxford Economics, wrote in a research note. ‘Growth has since slowed, and we expect markedly weaker activity’ in the October-December quarter and beyond.”
Brookings: “The flashy GDP growth number for the third quarter is more a statistical quirk and reflection of the sharp dive and subsequent bounce in the spring, not an indication of current momentum. We cannot count on the economy to heal itself, it will take direct action.”
The economy needed to grow at a 54% annualized rate in Q3 to get back to where it was at the start of the year—much less make up for lost growth.
Wall Street Journal: “But the way the math on annualization and percentages works, it would take a much bigger bounce in GDP—an annualized 46.4%—to get back to even with the first quarter. And to get back to even with the fourth quarter of last year, before the Covid crisis hit, it would have to grow at a 54.1% rate.”
NPR: “But with growth already tapering off as coronavirus infections start to climb again, the real improvement during the quarter will be significantly less than that — likely well short of the 9.9% quarterly growth rate that would be needed to erase the second-quarter decline.”
Wall Street Journal: “That leaves it 3.5% below its level from the fourth quarter of 2019. For it to fully recover in the fourth quarter of this year, it would have to grow at 15.2% annual rate, which isn’t going to happen.”
The economy is far from recovered and still in nearly as deep of a hole as the peak of the Great Recession.
New York Times’s Ben Casselman: “Even after the record-setting quarter, the economy is still 3.5% smaller than before the pandemic. By comparison, G.D.P. shrank 4% in the entire Great Recession.”
Brookings: “Don’t Let Flashy 3rd Quarter GDP Growth Fool You, The Economy Is Still In A Big Hole”
New York Times: “Even after the record-setting rebound in the third quarter, the economy is still in a hole as large as the worst point of many past recessions.”
GDP growth is slowing as we enter the final quarter because of Trump’s failure to contain the coronavirus or provide additional economic relief.
NPR: “However, that won’t be enough to repair all of the damage done during the spectacular collapse three months earlier. And with coronavirus infections now on the rise again, growth is likely to slow during the final months of the year, with a new relief bill from Congress seen as highly unlikely before next week’s election.”
Reuters: “Third-quarter GDP growth was juiced up by government money, which has since run out. That together with the resurgence in coronavirus infections has led to projections of a steep slowdown in activity in the fourth quarter.”
Associated Press: “Just be forewarned: The sizzling pace won’t last. The economy is weakening and facing renewed threats. Confirmed viral cases are surging. Hiring has sagged. Government stimulus has run out. And even last quarter’s outsize growth will leave the economy far below its level before the pandemic struck in March.”
For 32 consecutive weeks, more people have filed for benefits than during the single worst week of the Great Recession, and nearly 23 million Americans are receiving some form of unemployment benefits.
Seth Harris: “To put these numbers in perspective, the U.S. is 7.5 months into a pandemic-driven economic downturn and unemployment claims remain higher than their highest level during the Great Recession – an inconceivable level of volatility in jobs markets that’s barely slowing down.”
Washington Post: “All told, there were about 22.6 million people claiming some form of unemployment insurance for the week ending Oct. 10, the most recent weeks of statistics for that measurement.”
More than 10 million Americans are still out of work and millions of Americans have fallen into poverty and lost their health insurance.
Brookings: “Employment in the United States is still more than 10 million jobs below its level in February. Job growth, which broke records in June with almost 4.8 million jobs gained, slowed to 1.8 million jobs gained in July, 1.5 million in August, down to 660,000 jobs gained in September. If job growth continues to slow, it will take years to bring the economy back to its level of employment before the COVID recession. Job growth certainly does not look like a ‘V’ anymore.”
NBC News: “The number of Americans living in poverty grew by 8 million since May, according to a Columbia University study, which found an increase in poverty rates after early coronavirus relief ended without more to follow.”
CBS News: “The coronavirus is not only deadly, it’s also leaving many Americans without medical coverage as the unemployment rate continues to surge. Since the pandemic hit the U.S., more than 6 million Americans have lost health insurance they’d previously had through their work. And when you take into account spouses and children, the number of those affected climbs to more than 12 million, according to new research.”