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business Thursday 29 OcTOber 2020
Blowout U.S. economic growth in summer is already fading

By CHRISTOPHER RUGABER
AP Economics Writer
WASHINGTON (AP) —
Americans may feel whip-
lashed by a report Thursday
on the economy's growth
this summer, when an ex-
plosive rebound followed
an epic collapse.
The government will likely
estimate that the economy
grew faster on an annual-
ized basis last quarter than
in any such period since
record-keeping began in
1947.
Just be forewarned: The siz-
zling pace won't last.
The economy is weaken-
ing 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 econ-
omy far below its level be-
fore the pandemic struck in
March. "The strength of this A passer-by walks past a store closing sign, right, in the window of a department store, Tuesday, Oct. 27, 2020, in Boston.
figure is an optical illusion," Associated Press
Nancy Vanden Houten, an er numerical base. To use virus remains out of con- undergone three surger- lion jobs short of recovering
economist at Oxford Eco- a simple example: A drop trol, and the risks of social ies this year, including two all the 22 million jobs that
nomics, wrote in a research from 100 to 70 is a 30% fall. and economic activity are related to a burst appen- were lost to the pandemic.
note. "Growth has since Yet a 30% rebound from 70 maybe even higher than in dix, leaving the family with "We bounced off the bot-
slowed, and we expect gets you only back to 91. the spring," said Aaron So- $98,000 in medical bills. tom really aggressively, but
markedly weaker activity" You'd need a 43% gain to journer, a labor economist Her husband still has his job since then, there is this de-
in the October-December get back to 100. at the University of Minne- at a warehouse. And Taya- celeration," said Seth Car-
quarter and beyond There are deeper reasons, sota. ma, who lives near Sacra- penter, chief U.S. econo-
In the last major report on too, for viewing Thursday's Americans are showing mento, California, at first re- mist at UBS. "The big issue is
the U.S. economy before report on gross domestic growing concern about the ceived a $600-a-week job- not how big the third quar-
Election Day, economists product with skepticism. economy. Consumer confi- less benefit that Congress ter rebound is, but how fast
have forecast that growth It reflects huge gains last dence slipped in October provided in a $2 trillion aid is the next phase of the re-

in the July-September quarter that resulted from after having risen sharply package it passed in the covery coming?"
quarter soared to a 31% simply reopening many in September. Consumers' spring. But the $600 benefit Carpenter said he thinks
annual rate, according to businesses after the virus outlook for the economy expired in July. Tayama's growth is slowing to just a
data provider FactSet. That had paralyzed the econo- over the next six months state jobless aid of $75 a 2.5% annual rate in the cur-
would follow a plunge of my in March and April. fell particularly hard, ac- week has also lapsed. As rent quarter, and that the
31.4% in the April-June peri- Since August, the econom- cording to the Conference a consequence, her family economy won't return to
od — by far the worst quar- ic outlook has darkened Board, a business research has fallen behind on their its pre-pandemic levels of
terly drop ever — when the as hiring has slowed. Con- group. utility bills, and the medical output until late next year
eruption of the coronavi- sumers may spend warily "There is little to suggest debt is in collections. or early 2022.
rus closed businesses and during winter. And if the that consumers foresee the Despite 25 years of expe- The job market may take
threw tens of millions out of rise in COVID cases were economy gaining momen- rience in office adminis- longer to fully recover, Car-
work. to cause widespread busi- tum in the final months of trative work, Tayama is penter said. Millions have
If the analysts' outlook ness shutdowns or restric- 2020, especially with CO- looking for jobs outside an dropped out of the work
proves roughly accurate, tions, the economy would VID-19 cases on the rise office, with little or no cus- force and are no longer
the economy, as of last struggle to sustain a solid and unemployment still tomer contact, like delivery looking for work, artificially
quarter, will have recov- recovery. Economists at high," said Lynn Franco, the driving. reducing the unemploy-
ered only a bit more than Goldman Sachs have al- board's senior director of "It's just very scary to go ment rate. They includes
two-thirds of the output it ready slashed their growth economic indicators. back" to an office, she said. many women who have
lost to the pandemic reces- forecast for the fourth quar- The pandemic has also "I don't want to be in con- had to leave jobs to care
sion. The economy shrank ter to a 3% annual rate from complicated the job hunt tact with a lot of people." for children now attending
at a 5% annual rate in the 6%. The seven-day rolling for many of the unem- But finding work may be a school online from home.
first three months of the average for confirmed new ployed. One of them is An- challenge. Though the un- The proportion of Ameri-
year. cases in the U.S. soared nette Tayama, who lost an employment rate, at 7.9%, cans who are either work-
Mathematically, a bounce- over the past two weeks administrative temp job in is down significantly from ing or looking for work has
back that equals or even from 51,161 to 71,832, ac- March. She was fired be- 14.7% at the outset of the sunk to 61.4%, the lowest
slightly exceeds an ear- cording to Johns Hopkins cause she didn't want to pandemic recession, it is level since 1976.
lier drop doesn't mean the University data, and con- return to the office for fear still historically high. And "That's the real measure
economy has fully recov- firmed infections are rising of infecting her 16-year old hiring has slowed for three from my perspective as to
ered. The reason is that the in 47 states. son, who was recovering straight months. The econ- whether we're recovered,"
rebound comes off a small- "The basic reality is that the from knee surgery. He has omy is still roughly 10.7 mil- Carpenter said.q