U.S. GDP Growth Slows to 2% in 3rd Quarter
The U.S. overall economy grew in the third quarter at the slowest fee since the pandemic recovery started in the spring, reflecting the effect of the delta variant and supply-chain constraints.
The Commerce Section noted Thursday that gross domestic item rose at a two.% annualized rate in the third quarter, beneath economists’ forecasts of a two.8% increase. It was the smallest achieve since the 31.two% pandemic-fueled plunge in the next quarter of 2020.
GDP grew six.seven% in the next quarter of this calendar year, which preceded the distribute of the delta variant of the coronavirus.
In accordance to MarketWatch, economists attribute the slowdown in the third quarter to fading authorities help for the overall economy, supply-chain bottlenecks, and the surge in circumstances of delta variant.
“Overall, this is a huge disappointment specified that the consensus expectation at the begin of the quarter in July was for a seven.% achieve and even our personal bearish 3.5% forecast proved to be too optimistic,” wrote Paul Ashworth, main U.S. economist at Money Economics.
“As delta circumstances carry on to subside, there may perhaps be extra progress in the fourth quarter as consumers will be extra inclined to shell out on companies involving in-particular person interactions.”
— Dawit Kebede, senior economist at the Credit history Union Nationwide Association
But economists hope solid buyer need and an easing pandemic to raise progress in the coming months.
“The third quarter was grim but it has minor to say about the fourth quarter. The Oct-December quarter will be extremely distinctive shelling out on companies is presently rebounding as delta subsides,” claimed Ian Shepherdson, main economist at Pantheon Macroeconomics.
Development in the third quarter was led by a pickup in inventories. But with supply-chain disruptions creating it difficult for U.S. stores and factories to get the goods and pieces they need to have, shelling out on goods fell two.4% in the third quarter, led by a steep drop in sales of cars and trucks and other extensive-long lasting produced goods.
Paying out at hotels and dining places rose, indicating that the direct harm from the delta variant was reasonably modest and has started to fade. U.S. lodge occupancy was at 65% for the week finished Oct. sixteen, the maximum amount since mid-August.
“As delta circumstances carry on to subside, there may perhaps be extra progress in the fourth quarter as consumers will be extra inclined to shell out on companies involving in-particular person interactions,” claimed Dawit Kebede, senior economist at the Credit history Union Nationwide Association.
