Big rebound expected for Q3 after US economy fell 31.4% in spring

     The U.S. economy plunged at a record rate in the spring but is poised to swing to a record increase in the quarter just ending.

    The Commerce Department reported this morning that the gross domestic product, the economy’s total output of goods and services, fell 31.4% in the April-June quarter, only slightly changed from the 31.7% drop estimated one month ago.

    The new report, the government’s last look at the second quarter, showed a decline that was more than three times larger than the previous record-holder, a fall of 10% in the first quarter of 1958 when Dwight Eisenhower was president.

    Economists believe the economy will expand at an annual rate of 30% in the current quarter as businesses have reopened and millions of people have gone back to work. That would shatter the old record for a quarterly GDP increase, a 16.7% surge in the first quarter of 1950 when Harry Truman was president.

    The government will not release its July-September GDP report until Oct. 29. 

    Economists are forecasting that growth will slow significantly in the final three months of this year to a rate of around 4% and could actually topple back into a recession if Congress fails to pass another stimulus measure or if there is a resurgence of COVID-19. There are upticks in infections occurring right now in some regions of the country, including New York. Read the full story.