US economy grows as COVID recovery cools down

0
12


US GDP rose just 2 percent in the third quarter of the year — slower than expected — as the supercharged recovery from the depths of the COVID-19 pandemic cooled down amid rampant inflation and shortages, the feds announced Thursday.

America’s gross domestic product — the value of all goods and services produced here — grew by TK percent from July to September compared with the same period a year ago, the feds said Thursday.

That’s a significant slowdown from the 6.7 percent spike in GDP growth seen last quarter, as the economy powered forward thanks to rapid vaccinations and pent-up demand to spend from Americans across the country.

Economists polled by Dow Jones and The Wall Street Journal expected an annualized growth rate of 2.8 percent in the third quarter.

The most recent quarter’s lackluster economic growth came as businesses across the country faced various operational challenges — from labor shortages to a snarled global supply chain — that have likely held back sales.

The feds on Thursday also released a separate that showed new jobless claims, seen as a proxy for layoffs, fell to 281,000 last week, down 10,000 from the prior week’s revised level of 291,000.

Job line.
The GDP showed a significant slowdown from the 6.7 percent spike seen last quarter.
Andrew Caballero-Reynolds/AFP via Getty Images
A graph showing the GDP change per quarter.
A graph showing the GDP change per quarter.

Economists surveyed by Dow Jones expected initial claims for unemployment last week to remain unchanged at exactly 290,000.

Weekly new claims have fallen substantially from the 2020 peak of about 6.1 million new claims in a single week.

The week-over-week numbers have inched closer to historical averages over the past month. The US was booking about 200,000 new claims per week before the pandemic gutted the economy.

Job flyer.
Weekly new jobless claims have fallen substantially from the 2020 peak of about 6.1 million new claims in a single week.
Bryan R. Smith/AFP via Getty Images

Continuing claims fell by 237,000 from the prior week’s revised level, according to the new data. That figure stood at more than 7 million at the same time last year, in the thick of the pandemic.

More than 2.4 million Americans remained on traditional state unemployment benefits as of Thursday, the feds added.

The weekly report comes after the September jobs report came in way lower than economists expected, adding just 194,000 jobs for the month.

Cars in a lot.
New vehicles await shipment at the Fiat Chrysler Belvidere Assembly Plant.
EPA
A graph showing seasonally adjusted unemployment claims.
A graph showing seasonally adjusted unemployment claims.

September’s numbers fell far short of economists’ expectations of 500,000 jobs added, and comes after the country added a disappointing 366,000 jobs in August.

The pair of consecutive, disappointing reports indicated that the labor recovery will likely take longer and be bumpier than expected, economists said.

Labor Secretary Marty Walsh acknowledged that it was “not the best number” but blamed the poor state of the economy solely on the pandemic, saying that the flare-up in cases drove people back home.

Now hiring sign.
Labor Secretary Marty Walsh blamed the poor state of the economy solely on the pandemic, saying that the flare-up in cases drove people back home.
David Zalubowski/AP

“There’s no question that we have work to do. Number one, we’re still living with a pandemic, it’s a worldwide pandemic,” Walsh ​said on “Axios on HBO” Sunday evening. ​​​​

“Also, people concerned about the Delta variant, people concerned about their personal health. We have folks that are vaccinated, folks that aren’t vaccinated, people who are vaccinated worried about the people that aren’t vaccinated,” he ​continued.​



Source link

LEAVE A REPLY

Please enter your comment!
Please enter your name here