US GDP slowed sharply in Q3 but big rebound expected in Q4 [View all]

[mahatmakanejeeves]

Source: Associated Press, via the Washington Post

{this is a corrected version. I moved the original to the "Comments:" box.}

By Martin Crutsinger?|?AP
Yesterday at 12:26 p.m. EST

WASHINGTON — The U.S. economy slowed to a modest annual rate of 2.1% in the July-September quarter according to the government’s second read of the data, slightly better than its first estimate. But economists are predicting a solid rebound in the current quarter as long as rising inflation and a recent uptick in COVID cases do not derail activity.

The increase in the gross domestic product, the economy’s total output of goods and services, is up from an initial estimate of 2% for the third quarter, the Commerce Department reported Wednesday. But the revision was still well below the solid gains of 6.3% in the first quarter this year and 6.7% in the second.

The small increase from the initial GDP estimate a month ago reflected a slightly better performance for consumer spending, which grew at a still lackluster 1.7% rate in the third quarter, compared to a 12% surge in the April-June quarter. The contribution to GDP from business inventory restocking was also revised up.

The economy’s weak summer performance reflected a big slowdown in consumer spending as a spike in COVID-19 cases from the delta variant caused consumers to grow more cautious and snarled supply chains made items such as new cars hard to get and also contributed to a burst of inflation to levels not seen in three decades.

While COVID cases in recent weeks have started to rise again in many parts of the country, economists do not think the latest increase will be enough to dampen consumer spending, which accounts for 70% of economic activity.

The expectation is that the economy in the current October-December quarter could grow at the strongest pace this year, with some economists forecast GDP could surge to an 8% rate in the fourth quarter.

For the whole year, the expectation is that the economy will grow by around 5.5%, which would be the best showing since 1984 and a big improvement from last year when the economy shrank by 3.4%. That was the biggest annual decline since an 11.6% plunge in 1946. when the nation was demobilized after World War II.

{snip}

Read more: https://www.washingtonpost.com/business/us-gdp-slowed-sharply-in-q3-but-big-rebound-expected-in-q4/2021/11/24/c9c78a82-4d2b-11ec-a7b8-9ed28bf23929_story.html

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Here is the original version. Crutsinger swapped in "the October-December quarter," when he meant to type "the July-September quarter."

I never noticed this. Hat tip, progree, for pointing this out.

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Business

US GDP slowed sharply in Q3 but big rebound expected in Q4

By Martin Crutsinger??AP
Today at 8:38 a.m. EST

WASHINGTON -- The U.S. economy slowed to a modest annual rate of 2.1% in the October-December quarter, slightly better than first reported. But economists are predicting a solid rebound in the current quarter as long as rising inflation and a recent uptick in COVID cases do not derail activity.

The increase in the gross domestic product, the economy's total output of goods and services, was up from an initial estimate of 2% for the third quarter. But the revision was still well below the solid gains of 6.3% in the first quarter this year and 6.7% in the second quarter.

The weak summer performance reflected a big slowdown in consumer spending as a spike in COVID-19 cases from the delta variant caused consumers to grow more cautious and snarled supply chains made items such as new cars hard to get and also contributed to a burst of inflation to levels not seen in three decades.

While COVID cases in recent weeks have started to rise again in many parts of the country, economists do not think the latest increase will be enough to dampen consumer spending, which accounts for 70% of economic activity.

The expectation is that the economy in the current October-December quarter could grow at the strongest pace this year, possibly topping 8%.