US reports jump in GDP as Election Day nears

The last major economic date of the US economy before the presidential election — the gross domestic product — showed the economy rebounded in the third quarter, increasing 7.4 percent over the prior quarter and at a 33.1 percent annual rate, the Commerce Department said Thursday.

GDP, the value of all goods and services produced in the US, increased as consumer and business spending soared. Economists surveyed by Bloomberg had forecast a 32 percent jump.

The report came amid this week's big stock market selloff and just five days before an election that President Donald Trump has attempted to position as a referendum on his overseeing the economy rather his handling of the COVID-19 crisis.

Trump said the GDP increase was proof that the pandemic-induced economic collapse caused by the pandemic was turning a corner thanks to his administration.

"Next year will be FANTASTIC!!!" Trump said in a tweet. "So glad this great GDP number came out before November 3rd."

Democratic presidential rival Joe Biden said many people won't feel like they are better off following the growth figures. "The recovery is slowing if not stalling; and the recovery that is happening is helping those at the top but leaving tens of millions of working families and small businesses behind," he said.

The GDP number was the fastest pace of annualized growth on record just after the worst drop on record. But it still left US economic output below pre-pandemic, levels as the country deals with another surge in coronavirus cases and no new stimulus package out of Congress.

"Record gains aren't enough to get us out of the hole that Covid left us in," Diane Swonk, chief economist at Grant Thornton, told The Wall Street Journal.

She cited risks from the recent surge in coronavirus cases as a potential economic headwind in the current fourth quarter, saying, "It's hard to reopen an economy unless workers and consumers feel safe and healthy."

"We're having a record recovery, but it comes after an even more record collapse, and it looks like economic momentum is fading in the fourth quarter," Jim O'Sullivan, chief US macro strategist for TD Securities, told The New York Times.

In other economic news on Thursday, the Labor Department reported that 732,000 workers filed new claims for state unemployment benefits last week, a decrease of about 28,000 from the previous week.

For several weeks, new claims for state jobless benefits have totaled roughly 800,000 a week, much lower than the total during March and April after the pandemic struck, but extraordinarily high by historical standards.

"These are remarkably elevated GDP levels of claims," said Mark Hamrick, senior economic analyst for Bankrate.com. "There are huge cross sections of our society and sectors within it that are suffering."

The better than expected GDP number pushed stocks higher, the first daily gain for the Dow Jones Industrial Average in five days, as it regained some ground from the previous session. The Dow closed 139.16 points higher at 26,659.11.

The S&P 500 climbed 1.2 percent to 3,310.11, and the Nasdaq Composite advanced 1.6 percent to 11,185.59.

Exxon Mobil said Thursday that low oil and natural gas prices would cause it to cut 1,900 jobs through voluntary and involuntary layoffs in the US in the next several months. The company directly employs more than 70,000 people and said the job cuts would primarily be in its Houston management office.