The US economy plunged at an unprecedented rate this spring and even with a record rebound expected in the just-ended third quarter, the US economy will likely shrink this year, the first time that has happened since the Great Recession.

The gross domestic product, the economy’s total output of goods and services, fell at a rate of 31.4% in the April-June quarter, only slightly changed from the 31.7% drop estimated one month ago, the Commerce Department reported on Wednesday.

The government’s last look at the second quarter showed a decline that was more than three times larger than the fall of 10% in the first quarter of 1958 when Dwight Eisenhower was president, which had been the largest decline in US history.

Economists believe the economy will expand at an annual rate of 30% in the current quarter as businesses have re-opened and millions of people have gone back to work. That would shatter the old record for a quarterly GDP increase, a 16.7% surge in the first quarter of 1950 when Harry Truman was president.

The government will not release its July-September GDP report until Oct. 29, just five days before the presidential election.

While President Donald Trump is counting on an economic rebound to convince voters to give him a second term, economists said any such bounce back this year is a longshot.

Economists are forecasting that growth will slow significantly in the final three months of this year to a rate of around 4% and the US could actually topple back into a recession if Congress fails to pass another stimulus measure or if there is a resurgence of COVID-19. There are upticks in infections occurring right now in some regions of the country, including New York.

In 2020, economists expect GDP to fall by around 4% , which would mark the first annual decline in GDP since a drop of 2.5% in 2009 during the recession triggered by the 2008 financial crisis.

The Trump administration is forecasting solid growth in coming quarters that will restore all of the output lost to the pandemic. Yet most economists believe it could take some time for all the lost output to be restored and they don’t rule out a return to shrinking GDP if no further government support is forthcoming.

So far this year, the economy fell at a 5% rate in the first quarter, signaling an end to a nearly 11-year-long economic expansion, the longest in US history. That drop was followed by the second quarter decline of 31.4%, which was initially estimated two months ago as a drop of 32.9%, and then revised to a decline of 31.7% last month.

The slight upward revision in this report reflected less of a plunge in consumer spending than had been estimated.

US private employers stepped up hiring in September, but diminishing government financial assistance and a resurgence in new COVID-19 cases in some parts of the country could slow the labor market’s recovery from the pandemic.

Private payrolls increased by 749,000 jobs this month after rising 481,000 in August, the ADP National Employment Report showed. Economists polled by Reuters had forecast private payrolls would rise by 650,000 in September. Employment gains were spread across all industries and company size.

Wall Street jumps: Wall Street’s main indexes jumped on Wednesday, led by industrials and technology-related stocks, as officials rekindled the idea of an imminent fiscal stimulus package, while upbeat data suggested a domestic economic recovery was on track.

US House of Representative Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin hoped for a breakthrough on COVID-19 relief as they prepared to resume talks aimed at hammering out a bipartisan deal.

All 11 major S&P indexes were up, with energy also among the biggest gainers, as data showed U.S. private employers stepped up hiring in September, while the Chicago PMI reading jumping to 62.4, the highest level since December 2018.

The S&P 500 was headed for its first monthly decline since the coronavirus-led crash in March, with trading becoming more choppy in the past few weeks on doubts about whether President Donald Trump would accept the election’s outcome if he lost.

In a chaotic and bad-tempered first debate, Trump and Democratic rival Joe Biden battled fiercely over Trump’s record on the coronavirus pandemic, healthcare and the economy.

Analysts said stock markets could also see quarter-end rebalancing of investor portfolios on Wednesday, as the previous session was marked by market participants booking profits after a strong start to the week.

Despite the expected weakness in September, the S&P 500 was on course for its best two-quarter winning streak since 2009 and the Nasdaq since 2000.

At 11:05am, the Dow Jones Industrial Average was up 1.30% with Boeing Co and Goldman Sachs Group Inc among the biggest boosts to the blue-chip index.

The S&P 500 rose 1.01% and the Nasdaq Composite added 1.08%.

Agencies