US President Donald Trump is looking to capitalize on a strong recovery in production in the third quarter as his final opportunity to return American voters' attention to economic issues in the final leg of the presidential contest.
According to the US Commerce Department, the world's largest economy is expected to grow between July and September at an annual rate of 31 percent, or around 7 percent, from the previous quarter on Thursday. This is based on the latest data from Reuters' consensus forecast. The Atlanta Fed model estimates an even steeper increase of 37 percent.
Such numbers represent a strong rebound from the rapid and damaging contraction the U.S. economy suffered earlier in the year when the coronavirus forced lockdowns and social distancing across the country. Production declined 5 percent in the first quarter, followed by a massive 31.4 percent decline in the second quarter on an annualized basis.
While the recovery has been faster than expected, US GDP levels are unlikely to hit or exceed pre-pandemic levels in the third quarter and the labor market remains in a deep hole. In September, 10.7 million Americans were less employed, compared to February.
Additionally, U.S. growth is expected to slow sharply in the current quarter as the U.S. sees a new surge in coronavirus and Congress and the White House struggle to reach another deal on fiscal stimulus to sustain the recovery . Oxford Economics is forecasting GDP growth of 3 percent for the fourth quarter.
For Mr Trump, who is outpacing his Democratic challenger Joe Biden in polls ahead of next week's presidential election, the snapback provides one last opportunity to claim he would be a better steward of the economy.
"We have a Super V (shaped recovery)… Nobody thought about it. Wait until you see that number in GDP," Trump said at a rally in Pennsylvania this week. "I'm taking 25 percent now. I'm taking 15. I think the record was like seven or eight. "
Trump vs Biden: Who will lead the 2020 polls?
Use the FT's interactive calculator to see which states are most important to winning the presidency
Mr Trump's ability to flatteringly describe the recovery was aided by the fact that the U.S. government reports GDP at annualized rates – the pace of production change if it happened over a full year. Many other countries use quarterly GDP movements, which give far smaller numbers.
Mr Biden and his allies have attacked Mr Trump's efforts to announce his economic record, stating that the president's abuse of the pandemic has primarily led to a deeper recession and has since slowed progress.
They also describe the shape of American economic recovery as a "K" rather than a "V" – with affluent households and large corporations doing well alongside financial markets while families and middle- and low-income businesses suffer badly from the impact of fiscal incentives USA are slacking off.
“(Mr Trump) has inherited the longest period of job growth in American history. But just like everything else he's inherited, he screwed it up, "said Barack Obama, the former US President, while fighting for Mr Biden in Florida this week.
“The economic damage he wrought by botching the pandemic means he will be the first president since Herbert Hoover to actually lose jobs. . . It's been a long time folks, ”he added.
Still, Mr. Trump is determined to make as much of the recovery as possible. He ran dozens of ads on Facebook earlier this week, boasting that third-quarter GDP growth would be "the highest in American history" and "more than double the previous record."
The ads were registered on Facebook at the last minute before there was a power outage on political ads on the platform ahead of the November 3rd elections.
Facebook refuses to review political advertisements. However, the company announced last month it would block new political ads in the week leading up to the US election. However, existing political ads will not be blocked.
Mr Trump's campaign appeared to have registered the ads in Facebook's public library as per protocol, but initially only showed them to a handful of users – suggesting they plan to step up their advertising at a later date.
Additional coverage from Demetri Sevastopulo
In the countdown to the 2020 election, stay up to date on the major campaign issues with our newsletter on US power and politics with columnists Rana Foroohar and Edward Luce. Login here