Next week, the U.S. economy is expected to turn to record growth in the third quarter, with projected GDP growth of 30 percent, which could mean a late surge in the election of President Donald Trump.
In the second quarter of the year, as the pandemic hit hard and states came to a standstill, the world’s largest economy collapsed at a record rate of 31.4 percent – the largest single quarter contraction in history.
The U.S. economy was pushed into recession when the coronavirus pandemic hit consumer and business spending as people stayed at home and businesses closed their doors.
However, economists are now predicting a rapid recovery in the quarter from July to September, when restaurants and stores reopen and people go back to work.
The government will release its third quarter GDP report on October 29, five days before the election.
News of a strong economic recovery could give the president a last-minute boost as he tries to convince voters to vote for a second term, especially in states with a tighter election campaign, such as Florida.
According to the FiveThirtyEight National Poll Tracker, Trump is 10.7 percentage points behind his Democratic challenger Joe Biden, although the electoral college system, not the popular vote, will decide the winner.
Trump’s poll on the economy shows that it is his strongest area against his opponent.
Despite the current recession, more Americans believe he is the better candidate to lead the economy, with only just over half of voters agreeing with the way he is handling the economy in the current crisis, according to a RealClearPolitics tracker.
But the release of the upcoming GDP report may be a little late for Trump. Many people voted early because of the pandemic, and polls suggest there are fewer undecided voters than in 2016.
The Federal Reserve predicts that the U.S. economy will shrink by 3.7 percent in 2020, less than the original estimate of a 6.5 percent contraction, while the International Monetary Fund (IMF) expects global growth to contract by 4.4 percent this year.
This is the worst global decline since the Great Depression of the 1930s.
Earlier this week, GDP data released by China revealed that the world’s second largest economy grew by 4.9 percent between July and September compared to the same quarter last year, with no forecast of 5.2 percent growth.
China, where the COVID 19 pandemic originated, is the first major economy to recover from the health crisis and is expected to be the only G20 country to record growth this year, although there are questions about the reliability of its data.