US Economic Growth Slowed To 2% In Third Quarter As Supply Chain Worsens
The U.S. economy grew at a 2% rate in the third quarter of 2021 as supply chain issues and the delta variant slowed gains.
The U.S. gross domestic product (GDP), a measure of net services and goods produced, grew at a 2% rate during the third quarter of 2021, the slowest gain of the pandemic era, the Bureau of Economic Analysis (BEA) reported Thursday.
GDP grew at a historically fast annual rate of 6.3% in Q1 and 6.7% in Q2 after government stimulus, businesses reopening and rising vaccination rates prompted spending, The Wall Street Journal reported. Economists surveys by Dow Jones projected growth of 2.8% in Q3, according to CNBC.
Thursday’s figure was the slowest GDP gain since Q2 2020, when it dropped 31.2% during the start of the COVID-19 pandemic, CNBC reported.
The Commerce Department also said consumer spending increased at an annual rate of 1.6% in Q3, a drop from the 12% figure in Q2, the WSJ reported. The dip reflects a weakness in spending on goods that the supply chain issues have disrupted.
Economists believe supply chain disruptions, including clogged ports and curbed manufacturing production overseas, helped create high inflation, which stunted economic growth, according to the WSJ. Experts project economic growth to pick up in the final months of the year if COVID-19 cases continue to drop.
“We had a temporary set of impediments coming from a resurgence of the coronavirus that should ease as we move through the quarters ahead,” Carl Tannenbaum, chief economist at Northern Trust, told the WSJ.
Other experts see Thursday’s figure reflecting President Biden’s failed approach for economic recovery.
“Today’s news that the US economy is growing at 2% is the latest evidence that Joe Biden’s policies of big government socialism have dramatically slowed the economy. We now have stagflation. The killer combination of high inflation and low growth-which led to the downfall of Jimmy Carter,” Stephen Moore, former Trump economics advisor, told the Daily Caller News Foundation.
“This is an awful report, and if you take out the build-up in inventories, America’s growth last quarter was effectively zero. This is more proof that President Biden is bungling the recovery and now faces serious questions about his competency to heal our economy,” Republican Texas Rep. and Ways and Means Trade Subcommittee Chairman Kevin Brady said in a statement shared with the DCNF.
Meanwhile, the number of Americans who filed for new unemployment claims decreased to 281,000 last week, marking the lowest level of new jobless claims since March 14, the Bureau of Labor Statistics announced Thursday.
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