The Historical Third Quarter GDP Report and Beyond
As expected, the initial reading of third quarter GDP was one for the ages. The quarter-over-quarter, seasonally-adjusted, annualized headline increase was an eye-popping +33.1%, slightly over the Bloomberg median forecast of +32%, and a sharp rebound from the historical -31.4% second quarter plunge. The third quarter gain was the largest in the post-WWII era. The previous post-war record had been +16.7% in 1950. Personal consumption, the largest component of economic growth, rose +40.7% in the third quarter following a -33.2% drop in Q2. Residential spending (housing) surged +59.3% after a -35.6% drop. Gross private investment climbed +83% after falling -46.6%. Virtually all categories followed a similar plunge/rocket pattern.