The U.S. economy surged in the third quarter, growing at a 4.9% annual pace — the strongest rate since mid-2019 — as consumer spending and business investment recovered from the coronavirus pandemic.
The gross domestic product (GDP) rate was better than the median forecast of economists surveyed by Bloomberg of a 4.3% advance. Up from a record 31.4% annualized contraction in the second quarter when the country was in lockdown, the quarterly increase was the sources for the first time in eight quarters of expansion.
Government spending excluding defense expenditures coupled with a pickup in consumer spending account for the surge. The latter was up 33.4%, the most since 1950, helped by languished savings due to coronavirus containment measures. Business investment and exports also increased, powering the increase. However, there is concern that with many businesses facing capacity constraints, the economy may be unable to continue the current rate of expansion.