WASHINGTON—Analysts continue to parse through what to make of last week’s Q3 Commerce Department data showing a 33.1% rebound in performance.
“The March to May dip was the most severe in history, while the recovery thereafter was also similarly record-breaking. Gains in the economy through September are undeniably encouraging," said Curt Long, NAFCU's chief economist and vice president of research. "The fact that GDP could nearly recover the entirety of the monumental losses from the first half of the year in a matter of months, even while tens of millions remain unemployed, testifies to the efficacy of the CARES Act."
According to the quarterly estimate, major contributions to real GDP came from personal consumption (+25.3%) – almost entirely in the services sector – and investment (+11.6%). Net exports deducted 3.1%, and government consumption deducted 0.7%.
PCE inflation, the Fed's preferred inflation metric, rose 3.7%. Meanwhile, core PCE inflation, excluding food and energy, rose 3.5%, Long said.
"Aggregate numbers are prone to obscure the conditions of the working class even in normal times (and especially during COVID), and there is a lot of work to be done to meet the needs of the unemployed and small businesses," Long added. "But the economic engine has seen a remarkable recovery and shows no sign of slowing down."