The United States’ economic growth rate stutters at 2%, falling short of expectations.


The United States’ economic growth rate stutters at 2%, falling short of expectations.

Economic growth in the United States is expected to have slowed to 2% in the third quarter, the slowest rate since the outbreak began. According to initial estimates, the GDP grew by at least 2.7 percent in the third quarter.

The Bureau of Economic Analysis (BEA) of the Commerce Department revealed new numbers on Thursday that indicate how the economy has been slowed by the COVID-19 pandemic’s aftershocks. Despite the injection of stimulus money from Congress, which led to a solid second quarter of growth, the data demonstrates that the economic recovery still has a long way to go.

Consumption and investment in this quarter were hampered by long-term problems such as supply chain bottlenecks, labor shortages, and rising inflation. Another component that lingered in the background, extending the pandemic and the return to normalcy in daily life, is the Delta variation.

The BEA found that a drop in fixed residential investment, federal government spending for non-defense investments, and the cessation of Paycheck Protection Program loan applications in the second quarter all slowed growth.

Another issue was the widening trade deficit, which has been exacerbated by the slow recovery of US exports. The trade imbalance increased by 9.2 percent, or $96.3 billion, on Wednesday, owing to a reduction in exports overseas, while imports only increased by 0.5 percent.

Consumer expenditure increased by 1.6 percent overall, according to the BEA, while spending on food and durable items decreased from the previous quarter. Inflation was having its toll on these products earlier in October, as evidenced by a drop in capital goods orders and a Consumer Price Index data that showed a price increase for basic goods like food.

Because they arrive a day before the latest statistics for the Personal Consumption Expenditures (PCE) index is announced on Friday, some of the explanations driving the slowdown in GDP growth take on increased significance. The PCE statistics will also be released ahead of a Federal Reserve meeting slated for Monday to examine how the central bank will act to slow inflation. The PCE is the Fed’s favored method of determining inflation in the economy.

The services sector’s strength, state and local government spending, and an increase in nonresidential fixed investment all contributed to growth this quarter. The Washington Newsday Brief News is a daily newspaper published in Washington, D.C.


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