Unemployment Claims in the US Dropped More Than Expected

The US labor market takes a breather. Requests for unemployment benefits fell more than expected, reaching 803,000 applications during the last week, while the market estimated 885,000. 

However, the previous week’s figure rose upwards, thus going from 885,000 to 892,000 requests. Therefore, the moving average of new applications for the last four weeks, considered a more reliable indication of trends in the labor market as it reduces volatility spikes, rose to 818,250.

US GDP improves its record rebound to 33.4% in its annualized rate in the third quarter

According to data from the second review of the Bureau of Economic Analysis of the Department of Commerce, the United States economy grew at a record rate of 33.4% in the third quarter. It is three tenths more than initially projected. Thus, the country’s Gross Domestic Product (GDP) registered an advance of 7.5% compared to the previous quarter. This is the most considerable rebound since World War II. The previous high was a 3.9% quarterly increase in 1950.

The rebound in quarterly GDP, which includes the value of all goods and services produced in the country, partially offsets a record drop in production at the beginning of the year when the virus and related closures disrupted business activity on this side of the Atlantic.

Updated estimates released Tuesday primarily reflect upward revisions in consumer spending and nonresidential fixed investment that offset a downward revision in exports.

The effect of the stimulus approved at the end of March was felt in full effect between the summer months. In the second quarter, when the economy suffered the confinements’ impact. The activity contracted 31.4% in its annualized rate or 9% compared to the previous period. In the first three months of the year, the United States registered a negative growth of 5% (annualized). 

Between July and September, the activity partially recovered. Even though coronavirus infections in multiple states forced backtracking in the different reopening plans. The Atlanta Fed GDPNow estimates that GDP grows in the current quarter by 11.1% in its annualized rate.

Between July and September, corporate profits increased 27.4% at their quarterly rate in the third quarter to $499.6 billion after declining 10.3% in the second quarter ($208.9 billion). In this way, compared to the previous year, company profits increased by 3.5% in the third quarter, despite the pandemic.