The Commerce Department on Thursday reported that the U.S. real gross domestic product (GDP) in the third quarter expanded at an annual rate of 33.1 percent, with a quarterly growth rate of 7.4 percent.

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Despite the seemingly fast rebound, the Q3 economy was still down by 2.9 percent compared with that of last year. Consumer spending is 3.3 percent down from the pre-pandemic level, and business investment is 4.9 percent lower. Exports are down by 15.3 percent and imports down by 7.1 percent.

Gregory Daco, the chief U.S. economist at Oxford Economics, commented that the Q3 GDP is "record-breaking & meaningless at the same time." He also noted that federal government spending is up by 2.6 percent from pre-pandemic level, while state and local government spending is down 1.9 percent.

Compared with the pre-pandemic peak in the fourth quarter of 2019, the U.S. economy is about 3.5 percent smaller.

The rebound in the third quarter came after the economy plunged at a revised annual rate of 31.4 percent in the second quarter amid mounting COVID-19 fallout, which has been the largest decline since the U.S. government began keeping records in 1947.

In the first quarter, the U.S. economy shrank at an annual rate of 5 percent, signaling an end to a decade-long economic expansion following the global financial crisis.

The Q3 advance was driven by a "surge" in consumer spending led by the demand for goods, and a "red-hot housing market" driven by fiscally stimulated income growth and historically low interest rates, Daco explained.