As expected, the American economy rebounded sharply in the third quarter, up 7.4 percent or 33.1 percent on an annual basis. This was by far the biggest gain recorded in a quarter since the government started keeping such records in 1947. Economists had predicted a 31.9 percent jump after the economy plunged 31.4 percent on an annual basis in the second quarter.

Still, the economy has not recovered fully from the late winter shut down and will probably show a contraction for the full year. Economists expect the fourth quarter will not expand as fast, due to a lack of federal stimulus and the rebound in both COVID-19 infections and hospitalizations (although deaths, while up over recent weeks, remain well below the rate in the spring, when the virus was picking off the low-hanging fruit and before doctors had developed effective treatments and procedures).

This is the last major economic indicator before the election next week and both sides will, doubtless, find ways to claim that it backs their position. Still, President Trump has been predicting a big rebound in the third quarter and he got one.

Jobs report
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