The V-shaped recover is real and it’s spectacular — but still incomplete. The final economic metric before next week’s national election proved the accuracy Donald Trump’s claims of a sharp recovery of the US economy. The Bureau of Economic Analysis released its advance report on overall growth, showing a 33.1% annualized growth in GDP for the third quarter.

Without a doubt, this gives Trump the closing message he wants and needs. He can turn away from the Hunter Biden nonsense and tell people they have a choice — keep succeeding on this path under Trump policies, or watch Biden sap the dynamism out of the economic recovery with massive new regulation, taxes, and energy-cost increases. That is an argument to which voters will respond.

Of course, it’s not quite that simple, as we haven’t recovered yet — and this report strongly suggests that we have more work to do. While Q3’s gain outpaces the Q2 loss of -31.4% in percentage terms, it still does not quite make up for the lost production in real terms. It is, however, a surprisingly big boost in an economy still beset by access restrictions in production and consumer activity:

Real gross domestic product (GDP) increased at an annual rate of 33.1 percent in the third quarter of 2020 (table 1), according to the “advance” estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP decreased 31.4 percent. …

The increase in real GDP reflected increases in personal consumption expenditures (PCE), private inventory investment, exports, nonresidential fixed investment, and residential fixed investment that were partly offset by decreases in federal government spending (reflecting fewer fees paid to administer the Paycheck Protection Program loans) and state and local government spending. Imports, which are a subtraction in the calculation of GDP, increased (table 2).

The increase in PCE reflected increases in services (led by health care as well as food services and accommodations) and goods (led by motor vehicles and parts as well as clothing and footwear). The increase in private inventory investment primarily reflected an increase in retail trade (led by motor vehicle dealers). The increase in exports primarily reflected an increase in goods (led by automotive vehicles, engines, and parts as well as capital goods). The increase in nonresidential fixed investment primarily reflected an increase in equipment (led by transportation equipment). The increase in residential fixed investment primarily reflected an increase in brokers’ commissions and other ownership transfer costs.

As the BEA notes, the gain in Q3 in real dollar terms ($1.64 trillion) still does not quite match the loss in Q2 ($2.04 trillion). In other words, today’s percentage increase comes from a lower baseline; we have not yet made up the ground from Q2’s loss, and we still have a significant (-5% annualized) loss in Q1 as well. However, we are clearly farther down that road than most expected at this point.

Media outlets like Politico had preloaded “dark cloud” takes on the expected record gains today, so take some of those with a grain of salt. However, that doesn’t mean this report is all wine and roses, either. The end of stimulus programs had a sharply negative impact on personal income (-$540.6B), disposable income (-$636.7B), and personal savings (-$1.93 trillion) in Q3. Real disposable personal income is down 16.3% in Q3, which means that this V-shaped recovery is at risk of running out of gas soon, unless people get back to work ASAP or more stimulus money gets to employers and consumers in the next few weeks.

That matters in a consumer-driven economy. The rise in Q3 is directly attributable to a 40.7% increase in PCEs, as well as an 83% increase in private domestic investment. Bear in mind that the latter is likely in significant part investments in social-distancing infrastructure and not necessarily business expansion. The increase in equipment costs (70%) accounts for much of this overall rise. This is the cost of doing business in the COVID-19 world, not an indication of explosive future growth. And it was likely funded mainly through stimulus funds.

Still, the CARES Act succeeded in its mission of undoing the economic damage of shutdowns and access restrictions. Now that we are entering a new phase of increased cases, the need for another round of stimulus is getting pretty clear, at least for programs aimed at protecting payrolls and preventing layoffs.

On that front, the news still appears to be improving, although not actually healed altogether. The Department of Labor’s new weekly initial jobless claims report beat expectations with a decrease of 40,000 to 751,000 — still way too high for a stable job market, however:

In the week ending October 24, the advance figure for seasonally adjusted initial claims was 751,000, a decrease of 40,000 from the previous week’s revised level. The previous week’s level was revised up by 4,000 from 787,000 to 791,000. The 4-week moving average was 787,750, a decrease of 24,500 from the previous week’s revised average. The previous week’s average was revised up by 1,000 from 811,250 to 812,250.

The advance seasonally adjusted insured unemployment rate was 5.3 percent for the week ending October 17, a decrease of 0.5 percentage point from the previous week’s revised rate. The previous week’s rate was revised up by 0.1 from 5.7 to 5.8 percent. The advance number for seasonally adjusted insured unemployment during the week ending October 17 was 7,756,000, a decrease of 709,000 from the previous week’s revised level. The previous week’s level was revised up 92,000 from 8,373,000 to 8,465,000. The 4-week moving average was 9,053,250, a decrease of 1,055,750 from the previous week’s revised average. The previous week’s average was revised up by 23,250 from 10,085,750 to 10,109,000.

The paid-benefits numbers (emphasis mine) have dropped dramatically since mid-June. Sixteen million people have come off of state-based paid benefits, which shows a tremendous shift back to employment. That has continued even in the absence of stimulus funds in programs like the Paycheck Protection Program, but that will only continue if consumers feel confident enough to keep spending. With income dropping and savings being depleted, that may not be for much longer.

However, a new policy of higher taxes on businesses and skyrocketing energy costs will kill any hope of longer-term recovery even more quickly. The Biden economic and climate agenda would be worse even with a stimulus than we would be without one under current policy. Increased taxes and doubling the base minimum wage would put businesses already on the bubble entirely into collapse. That is what is at stake on Tuesday. Trump had better make sure to push that message hard — and focus on it.