gGross domestic product grew at an annual rate of 2% in the third quarter of 2021, the Bureau of Economic Analysis said Thursday morning.
Growth was slower than forecast by forecasters and was well below the 6.7% growth rate the economy saw in the second quarter of this year. GDP grew at an annual rate of 6.3% during the first quarter.
Forecasters expect growth to pick up again in the coming quarters, but the result is a disappointment given hopes of a continued strong rebound from the pandemic.
âOn the less positive side of the data book, the annualized third-quarter GDP gain was 2%, well below the trend at the start of the year,â said Mark Hamrick, senior economic analyst at Bankrate. “Even so, this ‘disappointing’ reading is consistent with the long-term trend for the United States, probably only a fairly temporary slowdown caused by the global commodity bottleneck we have become too familiar with.”
The delta variant COVID-19, which spiked hospitalizations and deaths from early July and peaked last month, has likely held back economic growth. Household spending has slowed sharply, and many types of business investment have also fallen.
As businesses saw increased demand in the second quarter as more people were vaccinated and restrictions were lifted across the country, the surge in the delta caused companies to push back plans to reopen, to implement new vaccine and mask mandates; and cancel travel plans.
The latest jobs report was disappointing. The economy added only 194,000 new jobs in September because the delta variant slowed down trade. The unemployment rate is now 4.8%, well above what it was before the pandemic.
The worse-than-expected jobs report has given additional ammunition to economists who believe the country is suffering from a labor shortage, a claim that has been reinforced by news that the number of people resigning reaches its highest level since the United States began keeping statistical records two decades ago.
Too high inflation is also adding to the country’s economic difficulties.
Consumer price increased 5.4% for the year end of September – the highest rate since 2008. Inflation has also recently reached the highest level in 30 years in the gauge favored by the Federal Reserve.
The Fed and the Biden administration have consistently said prices will cool in the coming months, although others, such as the former Treasury secretary Larry summers, a democrat, were sound the alarm on rising prices for months.
Original location: Economic growth slowed significantly to 2% year on year in the third quarter
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