On Thursday, the Bureau of Economic Analysis has said that in the third quarter, the U.S. economy rose at its fastest rate in history, bouncing back at a 33.1 percent annual rate.
The result indicates that while the U.S. economy is emerging out of the deep hole dug by the COVID-19 pandemic, there is still a chance to regain all its pre-pandemic power.
The sensational report comes after a record-shattering 31.4 percent decline in the second quarter as the U.S. economy formally began a recession in February and a negative 5 percent impact in the first quarter.
In addition, many parts of the U.S. economy are recovering quicker than others. In the context of growing discrepancies, those gaps are cascading through the framework of American society.
President Donald Trump praised the headline statistics and posted on Twitter on Thursday: "Biggest and Best in Our Country's History" and cautioned that his Democratic opponent Joe Biden would indeed "kill it all" with tax increases.
However, the U.S. economic crisis is far from over.
An unprecedented recession, a slowing recovery
Out of the 22 million job losses throughout lockdowns, only 11.4 million have been restored. Most temporary unemployment is evolving into permanent losses of jobs.
COVID-19 infections are on the rise in some areas of the U.S., increasing the prospect of further growth-sapping initiatives of containment. France and Germany have imposed partial lockdowns in Europe, where infections are spiraling out of control.
Lockdowns intended to curb the transmission of the disease caused by the COVID-19 crisis. Seemingly overnight, the whole sectors of the U.S. economy ceased, creating an unparalleled market shock that rapidly turned into a demand shock as 22 million people have been tossed out of employment in March and April.
Customer-facing service sectors have been gutted, including the restaurants, who hire an unreasonable number of low-wage employees, and even some minorities and women.
In the third quarter, the Fed and Congress' joint initiatives helped to boost the U.S. economy, bringing money to the pockets of citizens to further unleash pent-up demand as lockdown constraints were rolled back.
This time, with drastic and immediate initiatives, the Fed responded much quicker, such as lowering interest rates to close to zero, restarting bond purchases to sustain borrowing costs at rock bottom, and also making available trillions of dollars of loans to keep credit markets from stressing out.
Congress has gone even further on the spending sector, authorizing about $3 trillion in virus relief funding to help small companies keep employees on payrolls as well as laid-off workers stay afloat.
And, an ever-present danger of COVID-19 looms over all this background of divisive political strife.
The trajectory of the virus, the election result, and even the restoration of the plateau are sending the U.S. down on an unpredictable path. One, which could contribute to a prolonged economic recovery.
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