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Trump Embraces GDP Growth, as Biden Warns That U.S. Is Still in 'Deep Hole'

The Wall Street Journal. logo The Wall Street Journal. 10/30/2020 Joshua Jamerson, Rebecca Ballhaus
Donald Trump et al. standing in front of a crowd © peter foley/EPA/Shutterstock

President Trump cast gross domestic product growth in the most recent quarter as proof that the pandemic-induced economic collapse was turning a corner because of his administration, though other indicators show many Americans continue to suffer financial strain.

The Commerce Department on Thursday provided the last major quantitative snapshot of the economy before the presidential election just five days away, and said the economy grew at a record pace of 33.1% annualized in the third quarter. The U.S. has recovered a good chunk of pandemic-related economic losses but the country is still below where it ended 2019.

Mr. Trump, who trails Democratic presidential nominee Joe Biden in many battleground-state polls, is following a playbook used by other incumbent presidents facing tough re-election contests. In 1992, for instance, President George H.W. Bush tried to convince voters toward the end of that year’s campaign that the economy was turning around after a recession. Voters elected Bill Clinton instead.

For Mr. Trump, the bet is that voters won’t fault him for the strain that the coronavirus has placed on the economy, which had seen consistent growth under his watch before the pandemic. He has also warned that a Biden administration would bring a “steep depression.” Voters have consistently viewed Mr. Trump as the candidate best suited to manage the economy, Wall Street Journal/NBC News polling through the year has found. In an early October survey, Mr. Trump led Mr. Biden on the question by 7 percentage points.

“GDP number just announced. Biggest and Best in the History of our Country, and not even close. Next year will be FANTASTIC!!!” Mr. Trump tweeted Thursday morning, saying that Mr. Biden’s proposed tax increases on the wealthy would undercut growth. “So glad this great GDP number came out before November 3rd,” the president tweeted.

Larry Kudlow, the top White House economic adviser, on a campaign call with reporters Thursday said Mr. Biden would jeopardize that growth with his plan to raise taxes on the wealthy, and vowed that the Trump administration would take a “targeted approach” to rising coronavirus cases that would rely on wearing masks and social distancing. Mr. Trump has urged neither at the dozen rallies he has held in the past six days.

The Trump campaign had been running Facebook ads, punctuated by rocket emojis, hailing the president’s leadership of the economy.

Mr. Biden said many Americans won’t feel like they are better off following Thursday’s GDP and job figures. “Millions of people out there are out of work, on the edge, can’t see the light at the end of the tunnel. And Donald Trump has given up,” Mr. Biden said in Broward County, Fla., where people in more than 200 cars attended a drive-in rally.

Mr. Biden has proposed a $700 billion plan to stimulate the U.S. economy, a strategy he says will rebuild the economy faster than Mr. Trump’s proposals.

The recovery is expected to slow in the fourth quarter as the jolt from the economy’s reopening and government stimulus fades, with unemployment expected to remain elevated this winter.

The Wall Street Journal’s October survey of economists found that more than half of respondents don’t expect GDP will return to its pre-pandemic level until next year and that the economy will contract 3.6% this year, measured from the fourth quarter of 2019.

Messrs. Trump and Biden have promised to create millions of jobs and further heal the economy if elected on Nov. 3. Analysts project the economy will end 2020 smaller than a year earlier, but grow in 2021. The U.S. as of September has recovered about half of the 22 million jobs lost in March and April, at the beginning of the pandemic.

The number of Americans filing initial claims for unemployment insurance fell last week to the lowest level since the pandemic began, though claims remain high by historical standards. Daily virus infections reached new highs over the past week, and it is too early to tell how employers and consumers will respond.

According to the Associated Press, 73.3 million early ballots have been cast so far. That surpasses the early-vote tally four years ago, when 58.8 million people cast early or mail-in ballots. Thirty-nine states, and the District of Columbia, have already topped 2016 early-voting levels.

Mr. Biden’s closing campaign argument centers around connecting the prolonged economic fallout to Mr. Trump’s handling of the virus.

Mr. Biden, who is scheduled to make stops in Florida on Thursday where the president is also campaigning, said earlier this week that Mr. Trump “crashed the economy that Barack and I left him. But we can build back better with an economy that rewards work, not wealth.”

Democrats are framing the nation’s economic bounceback as a long-term fight. Mr. Biden’s running mate, Sen. Kamala Harris of California, told reporters Wednesday while campaigning in Nevada that the country’s recovery won’t be “like flipping a light switch.”

Mr. Biden’s political supporters cast the fresh economic figures as proof that the U.S. has a long way to go. “If you lost $100 and then got back $65, would you feel well off? That’s what today’s GDP number means,” tweeted Steven Rattner, a Democratic financier and former Obama administration official.

Both campaigns are set to make a final blitz across the battleground states Friday and through the weekend, with both presidential tickets hosting events in Michigan, Texas, Florida, Pennsylvania and Wisconsin.

Biden campaign manager Jen O’Malley Dillon said in a statement Thursday that Doug Emhoff, the husband of Democratic vice presidential nominee Kamala Harris, tested negative for Covid-19 after a nonstaff flight crew member who traveled on a support plane for Mr. Emhoff tested positive earlier in the day. Mr. Emhoff in recent weeks has stepped up his campaigning on behalf of his wife and Mr. Biden. He recently campaigned in North Carolina and Pennsylvania. After a visit to Ohio, he is set to appear in Las Vegas on Friday.

Heading into the 2020 campaign, Mr. Trump expected the booming economy to be the centerpiece of his re-election effort, with the economy one of the few issues where he has consistently outpaced Mr. Biden in polling. In a Wall Street Journal/NBC News poll taken Sept. 30-Oct. 1, voters viewed Mr. Trump as better suited than Mr. Biden to handle the economy, 48% to 41%.

Under the Trump administration, the U.S. reached historic milestones for jobs, income and stock prices until March, when the pandemic upended the economy.

Mr. Trump has spent weeks predicting a record level of GDP growth. At a rally in Bullhead City, Ariz., on Wednesday, he urged supporters to “hold off on your vote until it happens,” telling the crowd: “If that number’s not big, you don’t even have to vote for me, OK?”

Write to Joshua Jamerson at joshua.jamerson@wsj.com and Rebecca Ballhaus at Rebecca.Ballhaus@wsj.com

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