Third quarter GDP remained a big topic of conversation over the weekend. And while one researcher is happy with the record-breaking numbers, he is not surprised by them.
Joel Griffith, a research fellow in financial regulations for The Heritage Foundation, says the economy has never seen anything like the July-September quarter's 33.1 percent annual growth rate.
"Of course, we've never seen such a sharp contraction, either, like we saw in the prior quarter," Griffith adds. "I actually was not that surprised that the number was so large, and that's because I'm one of the folks in D.C. that's actually left the D.C. bubble the past few months, and I've seen first-hand that other parts of the country are reopening and that people are getting back to normal."
Because this was the first look at third quarter GDP, future reports could revise the number up or down. But Griffith still likes what he sees.
"You have a lot of people that suggest that growth in the recovery is largely due to the fact that the federal government has spent trillions of dollars over the past year," he continues. "It is true the federal government has spent trillions, both in deficit spending and then in typical spending, but that is not why we saw the economy growing at such a fast clip in last quarter."
The researcher explains that the dollar amount of federal transfer payments seen with all the COVID benefits and with the Paycheck Protection Program actually fell by 20 percent in the third quarter, relative to the second, "so the big recovery in that third quarter has actually been because we've allowed businesses to reopen."
Democratic Party presidential nominee Joe Biden has dismissed the GDP number.
"This report underscores three inescapable truths about Donald Trump's economy," Biden said in a statement published on FoxNews.com. "We are in a deep hole, and President Trump's failure to act has meant that Q3 growth wasn't nearly enough to get us out of it; the recovery is slowing, if not stalling; and the recovery that is happening is helping those at the top, but leaving tens of millions of working families and small businesses behind."
In response, Griffith points out that this has not been the typical recession, because consumers had little to do with demand drying up. While he believes intentions were good -- trying to prevent the virus from spreading – "this has been the first time in United States history that a recession was caused because we actually intentionally stopped supply of goods and services."
As governors and mayors give the greenlight to reopen, people are enjoying the freedom to get back to school, church, and work. So with businesses starting up again, supply has come back online, "and that's why we're seeing this recovery," says Griffith.