The glimmer of good news follows disappointing results in the second quarter, which saw a decline of 11.8 percent. Economists polled by Reuters had forecast a 9.4 percent quarterly increase.
“A whopping 12.7 percent rebound in GDP in the third quarter is a bittersweet result with new lockdowns just being announced. That makes a double-dip unavoidable,” ING Economist Bert Colijn told Reuters.
The 19 countries making up the eurozone economy are all rebounding from the coronavirus slump at a faster rate than forecasts predicted. The recovery could stall as countries start curtailing activity to stifle a resurgence of the pandemic.
France and Germany are planning to re-introduce lockdowns for November, which could trigger a fourth-quarter slowdown.
European Central Bank Vice President Luis de Guindos told Reuters that he is not expecting any real kind of economic growth through the end of the year.
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Italian Economy Minister Roberto Gualtieri said that in order to avoid backpedaling after the third-quarter recovery, the government must make it an “absolute priority” to avoid a national lockdown.
U.S. Commerce Department data on Thursday (Oct. 29) showed a 33.1 surge in third-quarter GDP, the fastest growth rate on record, beating forecasts of a 32 percent increase. The uptick follows a dismal second quarter that posted the worst decline in history, 31 percent.
Customer spending, the main driver of the GDP, got a boost from pandemic assistance by way of stimulus checks and a temporary increase in unemployment benefits. Personal consumption on seasonally adjusted annualized rates hit $14.3 trillion, up from $13 trillion in the second quarter.
Disposable personal income dropped 13.2 percent to $636.7 billion in the third quarter. Comparatively, the second quarter posted a 44.3 percent increase, hitting $1.6 trillion.
