Trump Tries To Tout GDP Numbers That Show The Depth Of His Coronavirus Recession
October 29, 2020
Today’s GDP numbers are nothing to tout. What they really show is that the economy is far from recovered and still in nearly as deep a hole as the depths of the Great Recession. And we’re headed in the wrong direction with economic growth slowing in the fourth quarter because of Trump’s failure to contain the coronavirus or provide additional economic relief.
Through the third quarter, economic growth under Trump ranks last relative to his predecessors.
Steven Rattner: “So where does today’s GDP report put Trump’s performance relative to his predecessors? Through Q3, dead last at +1.0%. Assuming a consensus gain of 4% in Q4, still dead last.”
This is the second-largest nine-month GDP drop on record, and real per capita GDP is below what we had at the end of 2017.
EPI’s Heidi Shierholz: “GDP is now 3.5% below where it was at the end of 2019. THIS IS THE SECOND-LARGEST THREE-QUARTER DROP ON RECORD”
George Washington University’s Tara Sinclair: “In per capita terms, US real GDP is below what we had at the end of 2017.”
Even after today’s Q3 numbers, the economy is still in a hole nearly as deep as during the depths of the Great Recession.
Politico’s Sudeep Reddy: “Even after the GDP rebound, we’re left with a hole almost as deep as the final year 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.”
University of Michigan economist Justin Wolfers: “GDP rose by +7.4% in Q3 (pretty much exactly as expected), after falling by -9.0% in Q2 and -1.3% in Q1. All told, the economy is -3.5% smaller than it was at the end of 2019. For context, the economy is roughly as far below its peak as in the darkest days of the last recession”
The economy is still about 5% smaller than projected at the start of the year.
New York Times’ Nick Timiraos: “Though the magnitude of this decline is slightly better than the 4% peak-to-trough decline from 2007-09, the level of real GDP in the third quarter was 5% below where it would’ve been had a 2% trend rate of growth continued in the first three quarters of 2020.”
Former CEA Chair Jason Furman: “If the actual annualized growth rate is 35% for Q3 (so 7.8% growth for the quarter) the actual arithmetic would leave GDP 3% below its 2019-Q4 level and ~5% below the prior trend level. For context, this is roughly where the economy was in 2008-Q4 relative to 2007-Q4.
The economy has only recovered about 60 percent of its losses from before the pandemic hit, and is already showing signs of slowing.
Washington Post’s Heather Long: “BREAKING: The US economy grew 7.4% in Q3 — an annualized pace of 33.1%. The gain, while large, means the economy has only recovered ~60% of its covid losses. The economy is still smaller than it was a year ago, and the recovery is showing signs of slowing down.”
Politico’s Ben White: “Here is the GDP report. 33.1% gain on annualized basis. A record. But not enough to get us back where we were before the huge second quarter slide, much less pre-Covid level.”
NYU’s Nouriel Roubini: “Indeed, annualized figures are meaningless. GDP still well below 2019 level, 12+ million still unemployed and Q4 looks like 2 or 3% annualized, barely positive on a quarter to quarter basis. The Q3 V will be a Q4 U & could end up in a double dip W without a large fiscal stimulus”