The US economy grew at an annual rate of 2.0% in the third quarter amid the wave of Covid-19 fueled by the Delta variant, after growing 6.7% in the second quarter, the Department of Trade.
“The increase in GDP in the third quarter reflects the continued economic impact of the Covid-19 pandemic,” Xinhua news agency said on Thursday, citing the department’s Economic Analysis Bureau in a preliminary estimate.
“A resurgence of Covid-19 cases has resulted in further restrictions and delays in reopening facilities in parts of the country,” the office noted.
âPublic assistance payments in the form of forgivable loans to businesses, grants to state and local governments, and social benefits to households have all declined. “
In addition to increasing Covid-19 cases and declining government support, the U.S. economy is experiencing continued supply chain disruptions, which have driven up inflation and could darken the economic outlook going forward. .
The growth rate of 2.0% was lower than the rate of 2.8% estimated by economists polled by the Wall Street Journal.
The increase in real GDP in the third quarter reflected increased private investment in inventories, personal consumption expenditure (PCE), state and local government spending and non-residential fixed investment, according to the report.
The deceleration in real GDP in the third quarter was in part due to a slowdown in PCE, which rose 1.6% after jumping 12% in the previous quarter, according to the report.
From the second to the third quarter, spending on goods declined, led by motor vehicles and parts, and services decelerated, led by food services and accommodation.
The latest GDP data came about a week after the Federal Reserve released its latest Beige Book, which showed US economic growth slowed from mid-August to September, constrained by supply chain disruptions. , labor shortages and the uncertainty surrounding the Delta variant.
The Fed’s investigation noted that most districts reported “significantly high prices,” fueled by growing demand for goods and raw materials.
âReports of increasing input costs were widespread across all industrial sectors, due to the scarcity of products resulting from supply chain bottlenecks,â he said.
The Labor Department recently reported that inflation in the United States remained high in September as supply chain disruptions persisted for months as the Consumer Price Index rose 5.4% during the 12 months ending in September.
Treasury Secretary Janet Yellen said on Sunday that on a 12-month basis, inflation would remain high next year due to recent events, but she expected inflation to fall to acceptable levels in the second. semester of next year.
In the latest World Economic Outlook released earlier this month, the International Monetary Fund forecast the U.S. economy to grow 6.0% this year, down 1.0 percentage point from its projection. July.
(Only the title and image of this report may have been reworked by Business Standard staff; the rest of the content is automatically generated from a syndicated feed.)