Gross Domestic Product of United States grew 7.5% in the third quarter of 2020 compared to the previous quarter. His research focuses on the areas of labor and organizational economics, the digital economy and cybersecurity, and household finance and well-being, with a driving commitment to understanding how individuals and firms respond to large-scale change, particularly social and technological. Its overall score has decreased by 0.2 point due primarily to a lower trade freedom score. Got a confidential news tip? Third, counties with lower shares of college-educated individuals are also more likely to experience greater economic declines, which reflects the fact that jobs requiring a college degree are likely more digitally intensive. Some 228,000 people have died in the U.S. from the virus, which has infected nearly 9 million in the country. Global Business and Financial News, Stock Quotes, and Market Data and Analysis. source: World Bank 10Y 25Y All Rights Reserved. Second, we forecast 2020 GDP by discounting a monthly penalty on each county’s growth rate. Increased consumption along with sold gains in business and residential investment as well as exports fueled the third-quarter rebound. Shepherdson expects the consumer and business investment rebound that led Q3 to "rise much less quickly" in the final three months of the year. While the headline number "looks spectacular," it still leaves growth 3.5% beneath its level at the end of 2019, according to Ian Shepherdson, chief economist at Pantheon Macroeconomics. By at least one estimate, one year of severe social distancing may be required to avoid the most troubling public-health consequences of the pandemic and reduce the probability of a second wave. For all those reasons, our estimate is conservative and could be considered the upper bound of estimates of the slowdown. Moreover, these effects are unevenly distributed across sectors; for example, consumption on restaurant spending fell by a third, whereas credit-card and grocery spending increased significantly. First, we did not model substitution between brick-and-mortar and online goods and services. Gross domestic product shrank 9.5% in the second quarter from the first, a drop that equals an annualized pace of 32.9%, the Commerce Department’s initial … Used in combination with county data on infections—hospitalizations, recovery, and mortality rates—our estimates could help inform a mitigation strategy that differentiates across regions. Makridis earned his doctorates in management science and engineering and economics at Stanford University and his undergraduate degrees in economics and mathematics at Arizona State University. Our estimates are based on recently released data on real GDP (at 2012 prices) between 2000 and 2018 from the Bureau of Economic Analysis. U.S. GDP accelerated at a 33.1% annualized pace in the third quarter, the Commerce Department reported. Second, counties with lower median household income are likely to be more adversely affected, in principle, because they have fewer digital jobs. Second, we did not account for intersectoral linkages and nonlinearities, which have been important in understanding historical business cycles. He is also an MPP candidate at the Harvard Kennedy School. Sign up for free newsletters and get more CNBC delivered to your inbox. Each week, we will send you the latest in publications, media, and events featuring Mercatus research and scholars. Jonathan S. Hartley is an economics writer and researcher with interests in macroeconomics, finance, and sports analytics. Personal income fell sharply for the quarter as transfer payments from coronavirus relief efforts dissipated. Data is a real-time snapshot *Data is delayed at least 15 minutes. Accessed Oct. 8, 2020. For example, declines in employment among food and hospitality sectors may lead to lower real incomes for workers in those industries, who in turn will have less to spend on other goods and services in the arts, entertainment, or even manufacturing sectors. To measure digitalization, we use the share of information-technology-intensive workers in a given industry relative to the industry’s total workforce. CSV XML EXCEL. He has also worked in various government roles at the US Congress Joint Economic Committee, the Federal Reserve Bank of New York, and the Federal Reserve Bank of Chicago. The debt grew under Reagan, who ushered in massive tax cuts, and it surged under Obama, who used federal stimulus funds to aid the economy during … Local Phone: (703) 993-4930 - The economy contracted 4.8% in Q1 in seasonally-adjusted annualized terms (SAAR), according to an advance GDP estimate released by the Bureau of Economic Analysis. © 2021 CNBC LLC. Current US GDP Growth Rate is -1.78%. Online tool for visualization and analysis. DataBank. Nearly half the 22 million jobs lost in March and April remain unfilled and the unemployment rate remains at 7.9%, more than double its pre-pandemic level as 12.6 million Americans are still out of work. The increase is the same as in the “advance” estimate released in October. GDP rises 2% in United States in third quarter. While the news on Q3 was good for the $21.2 trillion economy, the U.S. faces a tougher road ahead as coronavirus cases increase and worries grow over the health and economic impacts. The latest numbers show economic output surged by an annualised 33% in the third quarter of 2020, following a record fall as a consequence of the coronavirus pandemic. That is part of the reason that the pace of growth is going to slow from here.". Moreover, these data could help policymakers understand the degree of substitutability between brick-and-mortar and online services, as well as the longer-run effects of uncertainty on investment and hiring. That's according to the third quarter third estimate from the Bureau of Economic Analysis (BEA). The Gross Domestic Product (GDP) in the United States was worth 21427.70 billion US dollars in 2019, according to official data from the World Bank and projections from Trading Economics. Our estimates are based on recently released data on real GDP (at 2012 prices) between 2000 and 2018 from the Bureau of Economic Analysis. It has the world's fifth-highest per capita GDP (nominal) and the seventh-highest per capita GDP (PPP) in 2020. The powerful growth pace came after states across the country shut down large swaths of activity in an effort to stem the spread of Covid-19, which the World Health Organization declared a pandemic on March 11. For simplicity, we use the 2001–2018 trend for each county and industry pair. ", For his part, Biden noted that while the economy improved "visits to food banks haven't slowed, and poverty has grown.". Fiscal support is diminishing. Our key assumption is that industries will remain productive in direct proportion to their degree of digitalization because at least that portion of their workforce can continue working from home and contribute services that do not depend as much on in-person interactions. Real economic growth probably will rise by 2.8 percent* (annualized rate) in 4Q20 while the US economy continues to wrestle with the COVID-19 pandemic. Makridis also serves as a senior adviser with Gallup. As a result, federal debt held by the public will hit 98 percent of GDP in fiscal 2020, which ends on Sept. 30, and exceed the size of the economy by 2021, the CBO reported in updated projections. Counties won by Democratic President-elect Joe Biden make up 70 percent of all U.S. economic output—or gross domestic product (GDP)—a new post-election study finds. We also examine the cross-sectional relationship between declines in county GDP and various county characteristics: median income, college attainment, and participation in international commerce (tradable sector). Published by John Elflein, Jun 8, 2020 Recent developments tell us that the United States will spend 18 percent of its gross domestic product on health care in 2020. Follow everything happening at the Mercatus Center from week to week by subscribing to This Week at Mercatus. Follow everything happening at the Mercatus Center from week to week by subscribing to This Week at Mercatus. The annualized measure represents how much GDP would grow over the course of a year at the current pace from the same level a year ago. He has previously worked at Goldman Sachs Asset Management as a Fixed Income Portfolio Construction and Risk Management Associate and as a Quantitative Investment Strategies Client Portfolio Management Senior Analyst. Fourth, and not surprisingly, we find that counties with a larger share of workers in nontradable sectors are also more heavily affected because those sectors are less diversified and more exposed to local shocks. But alternative data sources could more quickly refine early estimates such as ours. For example, data on online reviews (e.g., Yelp) or online food delivery (e.g., Caviar) could provide the utilization rate of the food services sector, as well as a way of gauging economic activity in real time. Watson Institute for International & Public Affairs. That intensity level is the share of digital workers within each industry derived from information on tasks at an occupational level from the Department of Labor’s O*NET database (see figure 1). Economic activity was strong in the real estate sector, and consumer and business executive surveys showed that confidence has remained high despite virus-related setbacks. "Absent new stimulus, and with Covid infections spreading rapidly, we're sticking to our 4% forecast for Q4 growth, though the margin of error here is large at this point," he added. We want to hear from you. We observe that counties with higher shares of digital workers are less affected by the pandemic, reflecting our assumption that industries in which employees can work from home suffer less disruption. Under these assumptions, we estimate a 5 percent decline in real GDP growth for every one month of partial economic shutdown. U.S. GDP accelerated at a 33.1% annualized pace in the third quarter, the Commerce Department reported. Coming off the worst quarter in history, the U.S. economy grew at its fastest pace ever in the third quarter as a nation battered by an unprecedented pandemic started to put itself back together, the Commerce Department reported Thursday. NOTE: The information regarding Military expenditures - percent of GDP on this page is re-published from the CIA World Factbook 2020. Personal consumption increased 40.7%, while gross private domestic investment surged 83% amid a 59.3% increase on the residential side. A surge in business and residential investment along with stronger consumer activity helped the economy after its worst-ever quarter in Q2. The stimulus programs that provided much of the economic lift last quarter have expired or are expiring. Although we could be quantifying the most optimistic scenario, our estimates are consistent with estimates of the effect of the influenza pandemic of 1918 and with other contemporary estimates. CSV XML EXCEL. This rate is 165 -tenths of one percent higher than the figure of -9% published in the second quarter of 2020. That intensity level is the share of digital workers within each industry derived from information on tasks at an occupational level from the Department of Labor’s O*NET database (see figu… ", In a tweet, Trump noted the "Biggest and Best in the History of our Country" GDP number and said growth in 2021 will be "FANTASTIC!!! WDI Tables. Third-quarter gross domestic product, a measure of the total goods and services produced in the July-to-September period, expanded at a 33.1% annualized pace, according to the department's initial estimate for the period. No claims are made regarding the accuracy of Military expenditures - percent of GDP information contained here. © Copyright 2021 Mercatus Center at George Mason University, 3434 Washington Blvd, 4th Floor, Arlington, VA 22201, Toll-free Phone: (800) 815-5711 - "There's still a lot of work to do here and the pace of improvement ... is going to slow. List of U.S. states, federal district, and territories by GDP (millions of current dollars) Rank State federal district or territory GDP in the 3rd quarter of 2020 % of Nation GDP per capita Region — United States: 21,170,252: 100.00: 63,565: 1 California: 3,120,386: 14.7: 79,261: West: 2 Texas: 1,772,132: 8.4: 60,357: South: 3 New York: 1,705,127: 8.1 The economy of the United States is that of a highly developed country with a mixed economy. The economy has been in a technical recession since February, as first-quarter growth declined at a 5% pace. Our estimates provide a baseline for comparisons in dynamic models with heterogeneous agents. That was better than the 32% estimate from a Dow Jones economist survey. In terms of raw percent change from a year earlier, the economy contracted 9% in the second quarter and 2.9% in Q3. Trump has promised a return to the strong growth prior to the pandemic, while Biden has accused the Republican incumbent of taking a thriving economy into a ditch due to mismanagement of the virus. Real gross domestic product (GDP) increased at an annual rate of 33.1 percent in the third quarter of 2020, as efforts continued to reopen businesses and resume activities that were postponed or restricted due to COVID-19. Gross domestic product of Canada and the United States 2021 Gross domestic product (GDP) of China 2019, by region Quarterly U.S. Real Gross Domestic Product (GDP) 2011-2020 Accessed Oct. 8, 2020. Markets reacted positively to the news, with Wall Street erasing a loss at the open and turning mostly positive. Thus, the economic cost of two months of mitigation measures is $2.14 trillion (10 percent). The United States experienced some of its best years of job gains in 2014 and 2015 in Obama’s second term when the economy added more than 225,000 jobs a … Media: (703) 993-4881, Holbert L. Harris Chair of Economics at George Mason University, The PPP Loan Program Left Too Many American Small Businesses Out to Dry, The U.K.’s Response to Covid-19 Has Been World-Class. A Division of NBCUniversal. Graph and download economic data for Federal Net Outlays as Percent of Gross Domestic Product (FYONGDA188S) from 1929 to 2019 about outlays, federal, Net, GDP, and USA. Private-sector investment in the economy fell by 49% percent, ... BEA Gross Domestic Product, 2nd Quarter 2020 … For example, supply-side shocks such as a pandemic lead to a differentiated decline in demand that, once adequately accounted for by a multisector model, finds more modest effects in government stimulus of demand than those usually obtained with a single-sector model. We estimate that the real GDP growth rate will decline 5 percent for each month of partial economic shutdown. A direr economic forecast of the effects of the lockdown estimates that there could be an annualized 10 percent decline in real GPD in Q1 of 2020 and an annualized 63 percent decline in Q2, comprising a deannualized total COVID-19 impact on GDP of approximately 25 percent. "This is going to be seized upon by both ends of the political spectrum as either evidence of the strength of the post-lockdown economic rebound or a cursory warning that the gains could be short-lived," said James McCann, senior global economist at Aberdeen Standard Investments. Rather than classifying certain industries as “directly affected” by COVID-19, we use the digital-labor intensity of each industry to quantify the varying effect across industries. That was better than the 32% estimate from a Dow Jones economist survey. Gross Domestic Product, Third Quarter 2020 (Advance Estimate) Real gross domestic product (GDP) increased at an annual rate of 33.1 percent in the third quarter of 2020 (table 1), according to the "advance" estimate released by the Bureau of Economic Analysis. "United States Budgetary Costs and Obligations of … Get the latest in research, commentary, and more from Mercatus scholars. The GDP release came just five days before Election Day, which culminates a heated battle between President Donald Trump and his Democratic challenger, former Vice President Joe Biden. "It's obviously good news that the economy bounced back in the third quarter," said Eric Winograd, senior economist at AllianceBernstein. For a visual county-to-county comparison, we offer a heat map that shows our estimate of penalties on growth for each county (figure 2). US GDP Contraction Revised Lower for 2nd Time 2020-09-30 United States GDP Growth Rate On the expenditure side, personal consumption expenditures accounts for 68 percent of total GDP out of which purchases of goods constitute 23 percent and services 45 percent. Christos A. Makridis is an assistant research professor at the W. P. Carey School of Business at Arizona State University, a digital fellow at the Sloan School of Management at MIT, a nonresident fellow at the Kennedy School of Government at Harvard University, and a nonresident fellow at the Institute for Religious Studies at Baylor University. Therefore, the economic cost of the first two months spent fighting the pandemic will be $2.14 trillion (10 percent), which is surprisingly close to the static fiscal cost of the CARES Act. 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