The US economy grew at a record pace in Q3 but the outlook for Q4 is not so bright

The US Gross Domestic Product rose by 33.4% in the third quarter, in rebound from Q2 31.4% contraction, the deepest drop in record.

Record pace of recovery was fueled by a massive $3 trillion pandemic relief but appears to have lost traction as raging new coronavirus wave and marathon talks that caused delay of new stimulus package highlighted the fourth quarter.

Consumer spending, which accounts for more than two thirds of US economic activity, led the broad recovery in Q3, but have since cooled as lack of government-funded weekly unemployment subsidy increased pressure on household incomes and slowed retail sales in past two months.

The resurgence in new Covid-19 cases, with over 17 million Americans being infected and over 300, 000 dead, slows the economic recovery and threatens of contraction in the fourth quarter.

State and local governments have re-imposed restrictions on businesses, hurting consumer spending and unleashing a fresh wave pf layoffs.

Grim situation was worsened by delay in providing additional fiscal stimulus for unemployed and struggling businesses, while economists expect new stimulus to provide some relief, but see the package insufficient and a bit too late, to spark stronger recovery acceleration, which could be expected only when pandemic winds down.