By Joshua Jamerson and Rebecca Ballhaus 

President Trump cast GDP growth in the most recent quarter as proof that the pandemic-induced economic collapse was turning a corner thanks to his administration, even as other indicators show many Americans continue to suffer financial strain.

The Commerce Department, in a report Thursday that provided the last major quantitative snapshot of the economy before the presidential election just five days away, indicated that the economy grew at a record pace in the third quarter. The U.S. recovered a good chunk of pandemic 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, President George H.W. Bush tried to convince voters toward the end of that year's campaign that the economy was turning around; voters didn't believe him, electing 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 Mr. Trump's watch before the pandemic. He has also warned that a Biden administration would bring a "steep depression."

"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.

Mr. Trump's political supporters, including his family members, cast the growth as evidence of the president's masterful handling of the economy. Donald Trump Jr., the president's son, tweeted: "THE GREAT AMERICAN COMEBACK!" The Trump campaign has 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.

"This report underscores three inescapable truths about Donald Trump's economy: 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; 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," Mr. Biden said. He added that without a deal in Congress on additional stimulus funding, Mr. Trump "still has no plan to get our country through this crisis and move us forward."

Mr. Biden has proposed a $700 billion plan to revive 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 temporary jolt from the economy's reopening and government stimulus fades, with unemployment expected to remain high 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 exceptionally 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.

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

 

(END) Dow Jones Newswires

October 29, 2020 11:44 ET (15:44 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.