Illustration: Aïda Amer/Axios

U.S. economic activity fell more sharply in the second quarter of this year than during any other quarter in history. It's also going to grow more sharply in the third quarter of this year than during any other quarter in history.

  • The recession is over, according to Wall Street, with current forecasts showing sustained economic growth through 2021 and beyond.

Why it matters: The novel coronavirus is still raging in the U.S., with well over 5,000 Americans still dying every week. But the continued prevalence of the pandemic doesn't seem to have crimped economic growth.

The big picture: America is in bad economic shape, and we've had very little economic stimulus since the federal government's $600 weekly unemployment checks stopped arriving in July.

  • Some 30 million Americans are on the unemployment rolls, entire industries are at a standstill, and economic output remains hundreds of billions of dollars below its pre-pandemic levels.

The other side: The Federal Reserve on Wednesday released its official forecast for how the economy is going to fare this year.

  • In June, when coronavirus cases were declining quite quickly, the Fed expected that we would end the year with unemployment at 9.3%, and saw the economy shrinking by 6.5%.
  • Today, with coronavirus deaths still at their June levels, the Fed is much more optimistic. It sees 2020 ending with unemployment at 7.6% and an economy that has shrunk by just 3.7%. That's still terrible, of course, for workers who are out of a job and businesses that are fighting for survival.

By the numbers: The difference is huge — almost 3 million extra jobs, and more than $600 billion in economic activity, over and above what the Fed expected just three months ago.

Data: FactSet; Chart: Axios Visuals

Wall Street has seen a similar turnaround in growth expectations. Quarterly GDP growth is measured on an annualized basis. On that basis, economic forecasters in April expected the third quarter to see a bounceback on the order of 13%.

  • By June, their forecast had improved to 18%. Now, they expect third-quarter GDP to grow at an astonishing 25.2% rate.

Between the lines: The rise in growth forecasts comes in the wake of new data showing surprisingly robust economic activity over the course of the third quarter, which ends next week.

  • It also shows just how difficult it is to make economic projections when there is no real precedent to look to.

The bottom line: "The path of the economy will depend significantly on the course of the virus," said the Fed in its most recent statement. But the past couple of months of economic growth have proved that the economy can grow much faster than expected even while the virus still rages.

Go deeper

Child care crisis is denting the labor market

Reproduced from Pew Research Center; Chart: Axios Visuals

New data from the Pew Research Center shows that parents are being hit especially hard by the coronavirus pandemic, and as far as job losses go, mothers and fathers are faring equally poorly.

Why it matters: Economists have been warning for months that the pandemic could do long-term damage to the economy as people remain unemployed for longer stretches of time.

Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Politics: Ex-FDA chief: Pence campaigning after COVID exposure puts others at risk — Mark Meadows: "We are not going to control the pandemic"— COVID-19 looms over White House Halloween celebrations.
  2. Health: 13 states set single-day coronavirus case records last week — Fauci says maybe we should mandate masks if people don't wear themU.S. reports over 80,000 new cases for second consecutive day.
  3. World: Italy tightens restrictions Spain declares new state of emergency.

Amy Coney Barrett's immediate impact

Illustration: Eniola Odetunde/Axios

In her first week on the job, Amy Coney Barrett may be deciding which votes to count in the presidential election. By her third week, she’ll be deciding the fate of the Affordable Care Act.

Where it stands: The Senate votes on Barrett’s nomination tomorrow. If she’s confirmed, Chief Justice John Roberts is expected to swear her in at the Supreme Court within hours, an administration official tells Axios.