U.S. Economy growth slowed to a 2% annual rate from July to September, the weakest quarterly growth since recovery from the pandemic recession that began last year, amid the ongoing global supply chain crisis and subsequent rising inflation.
According to Thursday’s report from the Commerce Department, the nation’s gross domestic product and its total output of goods and services declined sharply from the 6%- plus annual growth rates of each of the previous two quarters. Many economists point to a light at the end of the tunnel and forecast GDP to bounce back at a rate of 6% or even better in the current fourth quarter as confirmed COVID-19 cases decline, vaccination rates rise and more Americans venture out to spend money.
At the same time, though, rising prices, especially for gasoline, food, rent and other staples, are imposing a burden on American consumers and eroding the benefits of higher wages. Inflation has emerged as a threat to the Economy recovery and a key concern for the Federal Reserve as it prepares to start withdrawing the emergency aid provided to the Economy after the recession struck last year.