“The U.S. economy probably grew at record speed in the third quarter,” CNN says. But many people remain out of work due to the recent pandemic.
As CNN notes, “Economists polled by Refinitiv expect the economy expanded about 7% … between July and September compared to the prior three months. That would be a sharp gain from the second quarter.” “On an annualized and seasonally-adjusted basis, economists expect a 31% jump in the third quarter. That would be the biggest gain since the government began tracking quarterly GDP numbers in 1947.”
Back in the second quarter, the U.S. economy shrank. But it shrank far less than most other countries’ economies, which suffered worse. In the second quarter of 2020, the United States fared better than any other major economy in the OECD than Japan, with America’s economy shrinking at less than half the rate of the United Kingdom. The U.S. unemployment rate peaked at less than half of what many experts had predicted.
The U.S. unemployment rate fell to 8.4% in August, and 7.9% in September, although it remains well above its rate prior to the pandemic. Many experts had predicted that the unemployment rate would peak at over 30%. But it never rose above 14.7%.
However, slow economic growth in foreign countries may reduce demand for American products, harming our export sector. COVID has hit many countries harder than the U.S. Many countries in Latin America — such as Brazil, Peru, Chile, Ecuador and Bolivia — have had higher fractions of their population die from the coronavirus than the United States. Mexico’s official death rate from the coronavirus is about the same as America’s per million people, but its actual death rate is probably much higher.
In the second quarter of 2020, the U.S. economy fell by 7.8% less than Mexico’s, 2.5% less than Canada’s, and 4.3% less than France’s. It also fell by 14.4% less than India’s economy, which fell more than twice as much as the U.S. economy.
The economy has been harmed by school closures that force some parents to stay home from work. As CNN notes, “Last month, an unexpectedly high number of women dropped out of the work force. Experts think that’s due to childcare responsibilities as schools are still not fully back up and running.
Many schools remain closed, even though studies say it is safe to reopen the schools and daycare centers. “Shutting schools increases Covid-19 deaths,” rather than reducing them, says the University of Edinburgh. “Researchers from Yale University surveyed more than 57,000 U.S. child care providers. … They found no association between contracting the virus and exposure to child care,” notes the American Academy of Pediatrics. Despite such studies, an official in Los Angeles County said schools there would not reopen “until after the election.”
The unemployment rate temporarily rose in mid-October as Congress failed to approve additional coronavirus relief legislation. Republicans and Democrats have proposed competing coronavirus relief bills, but have not yet reached a compromise, and expanded unemployment benefits have expired in some states as a result.
Republicans had proposed spending $1 trillion to cover extended unemployment benefits, aid to small businesses that keep employees on their payrolls, and stimulus payments. Democrats had proposed spending $3 trillion to cover not just stimulus payments and extended unemployment benefits but many other things as well. For example, the Democrats’ bill provides $875 billion for state and local governments, $20 billion for tribal governments, and $25 billion for the Postal Service, according to CBS News.
The Democratic bill, the “HEROES Act,” also contains provisions that are viewed by some conservatives as a poison pill, such as federal aid to illegal aliens, and provisions releasing many prison inmates (including some murderers and rapists).