Tomorrow's GDP report is poised to be one for the record books, but economists warn that the numbers are likely to be deceiving.
What we're hearing: “The GDP is likely to catch a lot of attention tomorrow as we expect a historic 29.5% growth annualized," says Beth Ann Bovino, S&P Global's chief U.S. economist.
- "But, while growth is welcomed, we are nowhere near home yet. We need to regain almost 40% of the $1.85 trillion lost to get back to pre-crisis GDP levels seen in 4Q 2019.”
Be smart: Brookings Institution nonresident senior fellow Jay Shambaugh warns that because GDP is typically reported at an annualized pace, the numbers "can be a bit misleading." And further, "rapid third quarter growth does not mean the economy has strong momentum now."
- "Third quarter growth measures the average level of output in July through September compared to the average in April through June."
- "The very low level of output in April and May set a low baseline, meaning almost any bounce back at all would generate a huge growth rate for the third quarter."