The Commerce Department on Wednesday reported that third-quarter GDP growth was unchanged at 33.1%, which confirms the record-breaking expansion that occurred last quarter.
Still, last month’s growth is not enough to return the economy to pre-pandemic health. The economy contracted at a record-breaking 31.4% annual rate in the second quarter, and it is still 3.5% smaller than it was at the end of 2019.
Wednesday’s report comes as the spike in coronavirus infections is expected to weigh on future economic growth.
“The pandemic is raging on and with it, the combined toll on health, lives, and the economy,” said Mark Hamrick, Bankrate.com’s senior economic analyst.
COVID-19 cases have tripled over the past month, according to the COVID Tracking Project.
The increase in infections has prompted consumer confidence to fade, according to the Conference Board, a nonprofit think tank that provides economic projections.
Its latest data, released Tuesday, showed that the economy is not expected to gain strength in the coming months.
Cities are also shutting down eateries and watering holes to slow the spread of the virus.
The spike in virus cases has prompted a number of states to limit or prohibit visits to restaurants and bars.
Seating capacity has been restricted in states such as Connecticut, Kentucky, Louisiana, Montana, Maine, and Maryland.
In October, reservations were off by roughly 40% in many restaurants when compared to last year. They are now off by over 70% in several spots, according to OpenTable.
Providing more federal aid would help counter the affects of the virus and shutdowns on economic growth, according to Hamrick.
Congress has been at a gridlock over passing a second relief bill since the summer, as the political parties can’t agree on a price tag for more aid.
Democrats are eager to win as much of the $3.4 trillion package they passed in the House in May, while McConnell and the GOP said they’ll only agree to a more targeted, $500 billion package Republicans voted to support earlier this year.
A top adviser for Joe Biden said on Sunday that the president-elect would be willing to meet with McConnell to get Congress to reach a deal on a second COVID-19 relief package.
When asked by Fox News Sunday host Chris Wallace on whether Biden would pursue a meeting with McConnell, transition team spokeswoman Kate Bedingfield said, “Absolutely, yes.”
Hamrick sees a deal coming through if Democrats reduce their the amount of spending they want for relief.
“It appears to me that President-elect Biden will need to scale back the appetite among Dems for a much larger package,” he said.
