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WORLD NEWS

Economy

America's economic recovery hits a major roadblock


Story by Anneken Tappe

Story   Source

Published on October 29, 2021 6:48 AM
 
The frenzy in the car market, meanwhile, has been a hallmark of the recovery: New cars were in short supply due to shortages of chips and parts, so Americans bought used cars like never before, driving up prices and snapping up all the used vehicles available. Consumer confidence has recovered and Covid cases are no longer at the alarming highs seen in the third quarter.
 
This summer, the American economic recovery hit a roadblock.

The US economy grew at an annualized rate of only 2% in the third quarter, the Bureau of Economic Analysis reported Thursday.

The highly infectious Delta variant of the coronavirus, supply chain chaos, worker shortages, sluggish jobs numbers and higher prices weighed on economic activity.

It was far lower than the 2.7% economists had predicted and the slowest pace of growth since the start of the recovery, as well as a massive step down from the 6.7% rate in the spring.

Aside from the monumental downturn in the first half of 2020, when the economy ground to a halt amid lockdowns, it was also the worst quarterly performance since the final quarter of 2019, when GDP grew at a pace of 1.9%.

Spending slowdown

The slowdown was "more than accounted for" by a slowdown in consumer spending, according to the BEA, which dropped off after the stimulus check sugar rush faded.

Although American incomes rose $47.8 billion on the back of higher wages, even as...