U.S. economy grew at 33% rate in third quarter

The US economy grew at its fastest pace ever in the third quarter as a nation battered by an unprecedented pandemic started to put itself back together.Third-quarter gross domestic product, a measure of the total goods and services produced in the July-to-September period, expanded at a 33.1% annualized pace.Markets reacted positively to the news, with Wall Street erasing a loss at the open and turning mostly positive. Increased consumption along with sold gains in business and residential investment as well as exports fueled the third-quarter rebound.The third quarter GDP gain was powered by a record 40.7% increase in consumer spending. Americans began shopping again after the spring shutdown, which had sent consumer spending plunging by a record 31.4%. Consumer spending accounts for roughly two-thirds of economic activity.

The economy is now weakening again and facing renewed threats. Confirmed viral cases are surging. Hiring has sagged. Government stimulus has run out. With no further federal aid in sight this year, Goldman Sachs has slashed its growth forecast for the current fourth quarter to a 3% annual rate from 6%. Before the big rise in the July-September quarter, GDP had fallen 5% in the first quarter when the country's record-long expansion of nearly 11 years ended and then dropped a record 31.4% in the second quarter when much of the country shut down.