Carney: The Economic Recovery Looks Stronger Than Expected

The U.S. economy looks to be recovering at a faster pace than expected, triggering economists to upgrade their estimates for third-quarter growth.

Economic data this week indicated that the economy may be more resilient than expected. New claims for unemployment benefits fell below one million, beating forecasts, despite the failure of Congress to pass legislation and a rise in coronavirus cases in July. U.S. factory production was higher than expected in July. Consumer sentiment improved in early August. Retail sales, outside of the auto sector, were strong.

Even prior to this week’s wave of good data, economists surveyed by the Wall Street Journal in August saw the economy expanding at an 18.3 percent annualized rate, up from their July forecast of 15.2 percent.

The Atlanta Fed’s GDPNOW economic indicator reads the economy as running at a 26.2 percent growth rate, up from 20.5 percent a week ago. That very likely overstates what growth will be in the third quarter but it gives a good idea of just how strong recent economic data has been.

There is good news on the virus, as well. Over the past week, there have been an average of 53,303 cases per day, an 18 percent decline from the average two weeks earlier.