U.S. economic growth slowed markedly in the July-to-September period, weighed down by a summer surge in the coronavirus pandemic and a snarled supply chain for consumer products, the country’s Commerce Department reported Thursday.
The agency said the world’s biggest economy grew at an annualized rate of 2% in the third quarter, down from the 6.7% figure recorded in the April-to-June quarter. It was the weakest quarter of growth since the pandemic recovery began in mid-2020.
As the delta variant of the coronavirus spread through the U.S. in recent months, many Americans curtailed summer vacation travel plans and cut back on family outings to restaurants and other activities. At the time, more than 150,000 new coronavirus cases a day were being recorded; the figure now has dropped to less than half that.
As a result, some economists said they expected U.S. economic output to expand more rapidly in the coming months. But worries remain over the supply chain as container ships full of consumer goods from Asia remain anchored and unloaded off the U.S. Pacific coast.
Meager job growth is another worry. In September, only 194,000 new jobs were added to the U.S. labor force, down from the August figure of 235,000. The jobless rate fell to 4.8%, but that was because 5 million workers dropped out of the labor force.
Those monthly figures compared with more than 2 million jobs added during June and July.
About 8.4 million workers remain unemployed in the United States. There are 10.4 million available jobs in the country, but the skills of available workers often do not match what employers want, or the job openings are not where the unemployed live. In addition, many of the available jobs are low-wage service positions that the jobless are shunning.
The supply chain slowdown has left many U.S. retailers with dwindling stocks of clothes to sell and shelves empty of other products just ahead of the busiest annual holiday shopping season. Car dealers are often short of vehicles to sell.
The dwindling number of products to sell has boosted consumer prices in the U.S., pushing inflation up 4.3% in the third quarter from a year ago.
But the number of first-time claims for unemployment compensation continued to fall, the Labor Department said Thursday, as businesses avoid layoffs.
The agency said 281,000 claims were filed last week, down 10,000 from the week before. It was the third straight week the total was the lowest since the coronavirus pandemic started its sweep through the country in mid-March 2020.
The Federal Reserve, the country’s central bank, has said it could start reducing its support for the pandemic recovery in November, eventually increasing its benchmark interest rate to curb inflationary pressures.