For a country who has seen rapid economic growth in the COVID-19 recovery, the US is starting to see signs of slowdown. Ever since the staggering data that showed US GDP falling by an annual rate of 33 percentage points in the 2nd quarter of 2020, it’s been nothing but up, but in different chunks. COVID scares here and there have caused some minor dents, but to think that the US is back to pre-pandemic levels is impressive.
However, we need to focus on the future, and people are unsure if we can cross the pre-pandemic levels and continue our track. The 3rd quarter results for the US economy were released on Thursday, and GDP rose by an annual rate of 2 percent, which was the smallest gain in the economic recovery. Two things highlighted this, the first one being the Delta variant. Although consumers stayed strong during the major uptick in COVID cases, it still did enough to the US and the globe to dent the economy further. The second one is the supply chain bottlenecks that have plagued the economy in this quarter, which we’ve talked about a lot and how it’s been highlighted on specific industries. Adding on, the things that brought us to this stage in the recovery have been fading. The government is slowly pulling back stimulus, businesses are struggling to find workers, and vaccination rates have essentially flatlined. Fortunately, economists believe that this will all be a short-term problem, and that the economy is set for greater success. Consumer spending and activity is continuing to rise, which is giving real strength in that area of the economy, and it’s possible that this will continue to increase with the holiday season arriving. The only threat is the supply chain problems, with a good chunk of economists believing that it’ll revert to normal by the middle of 2022. Even then, if consumer demand and spending stay strong, it can carry us through the water. What do you think about the economic data?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.