UACES Facebook U.S. shows robust third quarter rally
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Oct. 30, 2020

U.S. shows robust third quarter rally

By Mary Hightower
U of A System Division of Agriculture 

Fast facts

  • Q3 gross domestic product up 33.1 percent from previous quarter
  • Q3 GDP clocks in at $18.5 trillion

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FAYETTEVILLE, Ark. — The U.S. gross domestic product grew 33.1 percent from the second quarter this year, making up nearly all the ground lost to impacts of the COVID-19 pandemic in the second quarter,  according to the October report from the Commerce Department’s Bureau of Economic Analysis.

ECONOMIC IMPACTS — See all our COVID-related economic analyses at

The report is one of the most widely anticipated and scrutinized due to its timing, which every four years, puts it just days before the presidential election.

“This is quite an impressive rebound from the 31.4 percent decline in real GDP in the COVID-interrupted second quarter,” economist John Anderson said. “However, it is important to recognize that the big percentage gain in GDP from the second quarter drop is not the same thing as a full recovery from the COVID shock.” 

Anderson is head of the agricultural economics and agribusiness department for the University of Arkansas System Division of Agriculture and the Dale Bumpers College of Agricultural Food and Life Sciences. He has been providing pandemic-related analyses of the economy since March.

“The aggregate economy remains smaller than it was pre-COVID, something that’s clear with a look at the raw numbers,” he said.  

The third quarter GDP amounted to $18.584 trillion. “By way of pre-COVID comparison, real GDP in 2019 amounted to $19.092 trillion,” Anderson said. “The economy therefore remains about 2.7 percent below its 2019 level: a strong recovery over a short time frame, to be sure, but not yet a full recovery.” 

Consumers are spending

Anderson said consumer spending “increased sharply in the third quarter on both goods and services, with the largest gains on durable goods. For the most part, spending on goods, both durable and non-durable, has eclipsed pre-COVID levels by a significant margin.”

Spending on services increased in the third quarter but were still lower than pre-pandemic levels. Transportation, recreation and food services, plus accommodations “are still a long way from a full recovery despite a strong third quarter rebound,” he said.

Pandemic-induced work-from-home culture did help one sector: software and information processing equipment. “Both are now larger than they were before the pandemic,” Anderson said. “Given the investments throughout the economy on remote communication capabilities, that should not be too surprising.”

Even though the economy remains in recession, “the lion’s share of second quarter losses have been recovered despite the ongoing negative effects of COVID on economic activity and the significant slowing of direct government support to both individuals and businesses, he said.

See Anderson’s analysis at

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About the Division of Agriculture

The University of Arkansas System Division of Agriculture’s mission is to strengthen agriculture, communities, and families by connecting trusted research to the adoption of best practices. Through the Agricultural Experiment Station and the Cooperative Extension Service, the Division of Agriculture conducts research and extension work within the nation’s historic land grant education system. 

The Division of Agriculture is one of 20 entities within the University of Arkansas System. It has offices in all 75 counties in Arkansas and faculty on five system campuses.

The University of Arkansas System Division of Agriculture offers all its Extension and Research programs and services without regard to race, color, sex, gender identity, sexual orientation, national origin, religion, age, disability, marital or veteran status, genetic information, or any other legally protected status, and is an Affirmative Action/Equal Opportunity Employer.

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Media Contact: Mary Hightower
Chief Communications Officer
University of Arkansas System Division of Agriculture