Big Percentage Fall and Rise of GDP - Pandenomic Extremes Explained

Thursday, third quarter GDP numbers came out. They sounded really good. They even set a record for gain in a single quarter. 

Let me put it in perspective.

Imagine that your GDP is 100. It drops 50%. You're now at 50. Now, imagine that your GDP goes up 50%. You're now at 75. Back to back fall and rise of 50% will actually leave you down 25%. It's not a trick. It's not a conspiracy. It's not a debate. That's just how percentages work.

Last quarter, the economy contracted 31% (at an annualized rate), a new record. Thursday it grew 33.1%. The net effect? GDP is down about 3% from a year ago - 5% from its trend.