It was much lower than the 2.7% that economists had obtained. foretold
and the slower pace of growth since the start of the recovery, as well as a huge decline since the 6.7% rate in spring
Aside from the monumental recession in the first half of 2020, when the economy came to a halt amid lockdowns, it was also the worst quarterly performance since last quarter of 2019
, when the GDP grew at a rate of 1.9%.
The slowdown was “more than explained” by a slowdown in consumer spending, according to the BEA, which declined after the sugar rush stimulus control
Although US income rose $ 47.8 billion thanks to higher wages, even as government benefits declined, disposable income actually fell 0.7%, or $ 29.4 billion.
The savings rate also fell to 8.9%, compared to 10.5% in the second quarter. In principle, that’s a good thing, because it helps the economy when people spend instead of saving. But during the summer, consumers also spent less as confidence took a hit amid the surge in Delta cases.
America spent less on goods, particularly cars, as well as services, and restaurants and hotels felt it more, as consumers again. He got nervous about being around others.
Meanwhile, the frenzy in the auto market has been a hallmark of the recovery: New cars were in short supply due to shortages of chips and parts, so Americans I bought used cars like never before
, raising prices and buying all available used vehicles. But the buying spree slowed over the summer and is now reflected in GDP.
Consumer confidence has recovered
and Covid cases are no longer at the alarming highs seen in the third quarter. So far, even high inflation doesn’t deter Americans from spending.
Economists believe this is a good sign for the last quarter of the year.
“We are confident that the fourth quarter will be much better,” said James Knightley, chief international economist at ING. “High-frequency consumer activity figures, such as flights, restaurant dinners and hotel stays, have risen from mid-September to October as the delta wave waned.”
That said, the supply chain chaos that became more apparent over the summer is still unresolved. In September, bottlenecks repressed industrial production
, and from October, billions of dollars in goods
they’re floating on container ships out of backward California ports.