Some perspective to the US Q3 advanced report yesterday
On paper, the record rebound in US GDP in Q3 sounds stunning but it needs to be put into better context. Despite the bounce, overall economic output still remains well below pre-virus levels and there are caveats attached to it.
After accounting for the figures, nominal GDP remained 2.7% below its level in Q4 2019 (⬆️) and in real terms, it is seen 3.5% below its level at the end of last year.
While the rebound means that the US economy has recovered about 2/3 its output lost seen in Q2, the stimulus measures during the last few months were arguably a key reason helping to “prop up” the economy in the last quarter.
All of that has been stripped away ahead of the election and with the virus situation worsening, the outlook bodes ill for another major rebound – if there even is one – in Q4.