The U.S. economy grew at an unrivalled pace in the third quarter as the government poured out more than $3 trillion US worth of pandemic relief that fuelled consumer spending, but the deep scars from the COVID-19 recession could take a year or more to heal.
Gross domestic product rebounded at a 33.1 per cent annualized rate last quarter, the Commerce Department said in its advance estimate on Thursday. That was the fastest pace since the government started keeping records in 1947 and followed a historic shrinkage rate of 31.4 per cent in the second quarter.
The GDP report — one of the last major economic scorecards before next week’s presidential election — will do little to mitigate the human tragedy inflicted by the coronavirus pandemic, with tens of millions Americans still unemployed and more than 222,000 dead.
With five days remaining to Election Day, President Donald Trump, trailing in most national opinion polls, will probably seize on the stunning rebound in GDP as a sign of recovery. But U.S. output remains below its level in the fourth quarter of 2019, a fact Trump’s Democratic challenger Joe Biden is almost certain to highlight along with signs that the growth spurt is fast petering out.
Economists polled by Reuters had forecast the economy expanding at a 31 per cent rate in the July-September quarter. The economy slipped into recession in February.
“We expect minimal growth in [the fourth quarter] as consumer and business anxiety can only increase amid rising virus infections,” BMO senior economist Sal Guatieri said in a commentary.
With no further U.S. government aid in sight this year, Goldman Sachs has slashed its growth forecast for the current fourth quarter to a three per cent annual rate from six per cent.
Unemployment benefits claims down
The government’s rescue package provided a lifeline for many businesses and the unemployed, juicing up consumer spending, which on its own powered the surge in GDP. But government funding has been depleted with no deal in sight for another round of relief. New COVID-19 cases are spiralling across the country, forcing restrictions on businesses like restaurants and bars.
Slightly more than half of the 22.2 million jobs lost during the pandemic have been recouped, and layoffs persist.
A separate report from the Labour Department on Thursday showed 751,000 people filed for state unemployment benefits in the week ending Oct. 24, compared to 791,000 in the previous period. Though claims have dropped from a record 6.867 million in March, they remain above their 665,000 peak seen during the 2007-09 recession.
TORONTO – Restaurant Brands International Inc. reported net income of US$357 million for its third quarter, down from US$364 million in the same quarter last year.
The company, which keeps its books in U.S. dollars, says its profit amounted to 79 cents US per diluted share for the quarter ended Sept. 30 compared with 79 cents US per diluted share a year earlier.
Revenue for the parent company of Tim Hortons, Burger King, Popeyes and Firehouse Subs, totalled US$2.29 billion, up from US$1.84 billion in the same quarter last year.
Consolidated comparable sales were up 0.3 per cent.
On an adjusted basis, Restaurant Brands says it earned 93 cents US per diluted share in its latest quarter, up from an adjusted profit of 90 cents US per diluted share a year earlier.
The average analyst estimate had been for a profit of 95 cents US per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 5, 2024.
ST. JOHN’S, N.L. – Fortis Inc. reported a third-quarter profit of $420 million, up from $394 million in the same quarter last year.
The electric and gas utility says the profit amounted to 85 cents per share for the quarter ended Sept. 30, up from 81 cents per share a year earlier.
Fortis says the increase was driven by rate base growth across its utilities, and strong earnings in Arizona largely reflecting new customer rates at Tucson Electric Power.
Revenue in the quarter totalled $2.77 billion, up from $2.72 billion in the same quarter last year.
On an adjusted basis, Fortis says it earned 85 cents per share in its latest quarter, up from an adjusted profit of 84 cents per share in the third quarter of 2023.
The average analyst estimate had been for a profit of 82 cents per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 5, 2024.
TORONTO – Thomson Reuters reported its third-quarter profit fell compared with a year ago as its revenue rose eight per cent.
The company, which keeps its books in U.S. dollars, says it earned US$301 million or 67 cents US per diluted share for the quarter ended Sept. 30. The result compared with a profit of US$367 million or 80 cents US per diluted share in the same quarter a year earlier.
Revenue for the quarter totalled US$1.72 billion, up from US$1.59 billion a year earlier.
In its outlook, Thomson Reuters says it now expects organic revenue growth of 7.0 per cent for its full year, up from earlier expectations for growth of 6.5 per cent.
On an adjusted basis, Thomson Reuters says it earned 80 cents US per share in its latest quarter, down from an adjusted profit of 82 cents US per share in the same quarter last year.
The average analyst estimate had been for a profit of 76 cents US per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 5, 2024.
