Weekly Economic And Financial Commentary – November 02, 2020
The US economy registered a sharp rebound in economic activity in Q3 2020, a significant recovery from the sharpest contraction in over 74 years. The economy expanded 33.1% YoY in Q3 from a contraction of 31.4% YoY in Q2. The expansion emanated from the continued efforts to reopen businesses and resume activities that were postponed or restricted due to COVID-19. The expansion in GDP was widespread with personal consumption expenditure increasing 40.7% YoY (from a fall of 33.2% YoY in Q2), private sector investment rose sharply by 83% YoY (from a decline of 46.7% YoY in Q2). On the other hand, net trade contributed negatively to top-line GDP in Q3 following a faster increase in imports by 91% YoY compared to growth in exports by 59.7% YoY, and government spending also declined 4.5% YoY (from an expansion of 2.5% YoY in Q2). Household disposable incomes expanded 7.7% YoY in Q3, and the savings rate rose by 136% YoY on average due to government income support to offset wage losses.
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