GDP GROWTH: TRENDING IN Q3 2021

The U.S. economy slowed in the third quarter as growth was tripped up by spiking Covid Delta infections, supply-chain bottlenecks, and ebbing fiscal stimulus. Annualized gross domestic product rose 2% in the third quarter, down sharply from 6.7% in the second quarter, according to the Commerce Department. Economists generally believe the slowdown will be temporary if virus infections continue to fall. This will enable greater socialization and a resumption of spending in restaurants and on travel – sectors that were hit hard in the last three months. “We had a temporary set of impediments coming from a resurgence of the coronavirus that should ease as we move through the quarters ahead,” Northern Trust economist Carl Tannenbaum told the Wall Street Journal. “It’s a speed bump, not a slowdown,” Constance Hunter, KPMG’s chief economist, told the New York Times. But there are concerns that disruptions in global logistics – such as the record levels of imports that are overwhelming U.S. port and trucking capacities – will take longer to sort out. The delays are costly. A fall-off in the production of cars and trucks, caused by computer chip shortages, hobbled booming auto sales and reduced the Q3 GDP by about 2.4%. “The economy doesn’t have a demand problem. It has a supply problem,” IHS Markit CEO Ben Herzon told the Washington Post.