Third-quarter GDP growth confirms super V-shaped recovery

The 33.1% annualized growth rate is double the previous record. Starting May 1st, the super V-shaped recovery started.

The US Department of Commerce just announced that real GDP grew at an annual rate of more than 33% in the third quarter of this year. That rate is double the previous record growth which was set more than half a century ago. It is now clear that a super V-shaped recovery is currently underway.

Even with the phenomenal growth rate, the economy is still about 3.5% lower than this time last year. But the speed of the recovery from the very deep, but short-lived recession is something never before seen in the US.

In January and February of this year, growth was very strong. In fact, it appeared that the economy in 2020 could have seen a 4% annual growth rate, which we haven’t seen in two decades. Then the virus hit and the economy was forced to almost completely shut down from mid-March until the end of April.

The effect of the shut-down in March was so bad that it dragged down the entire first quarter, which saw a 5% annualized decrease in GDP. The shut-down in April was similarly so bad, that even with a strong V-shaped recovery starting on May 1, the second quarter saw an annualized decrease in GDP of 33%.