Coming off the worst quarter in history, the US economy grew at its fastest pace ever in the third quarter as a nation battered by an unprecedented pandemic started to put itself back together.
The Commerce Department said on Thursday that real gross domestic product (GDP) skyrocketed by 33.1 per cent in the third quarter after plunging by 31.4 per cent in the second quarter. Economists had expected GDP to soar by 31 per cent.
Many statistics go into measuring the scale of an economic rebound and figures seen earlier in the week showed another mixed bag of data. Durable goods orders and home price growth exceeded expectations, while new home sales and consumer confidence numbers came short of expectations.
While the news on third quarter GDP was good, the US faces a tougher road ahead as coronavirus cases increase and worries grow over the economic impact of the surge.
Meanwhile, in its monetary policy meeting on Thursday, the European Central Bank held off from increasing its current economic stimulus but signalled that more could be coming at its December meeting given that risks are “clearly tilted to the downside”.
The decision comes amid growing concern that a renewed surge in COVID-19 cases in Europe could stall the recovery from a deep downturn early this year. Meanwhile, the central bank made no change to its USD1.35 trillion pandemic emergency bond purchase programme, which pumps newly-created money into the economy to keep credit flowing to businesses and promote economic activity. These regular purchases are set to run through the middle of next year.
Finally, in the UK, mortgage approvals surged to their highest levels since 2007, unexpectedly extending a post-lockdown surge, but there was a record drop in unsecured lending to consumers,
Bank of England data showed on Thursday. Mortgage approvals for house purchase jumped to 91,454 in September from August’s already-high reading of 85,530, exceeding forecasts that had instead pointed to a decline.
Activity in Britain’s housing market has rebounded sharply since the end of lockdown restrictions and was further fuelled when the government temporarily suspended property purchase taxes in July. Earlier in October, mortgage lender Halifax reported a 7.3 per cent annual rise in house prices for September, the biggest increase since 2016.
This article was compiled by Bank of Valletta for general information purposes only.