Delta Variant, Shortages Severely Restrict U.S. Economic Growth in Third Quarter

Reuters (10/28/21) Mutikani, Lucia

The U.S. economy experienced its slowest growth in over a year in the third quarter, with Gross Domestic Product (GDP) rising at a 2.0% annualized rate, attributed to rising Covid-19 infections impacting global supply chains and causing shortages of goods, which dampened consumer spending. This marks a significant deceleration from the 6.7% growth rate in the second quarter and was lower than economists’ expectations of a 2.7% increase. The delta variant of the coronavirus exacerbated labor shortages in various sectors, including factories, mines, and ports. Despite the economic slowdown, there was a decline in new claims for unemployment benefits, with initial claims reaching the lowest level since mid-March 2020, signaling a positive trend in the labor market.

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