U.S. Economy Growth Slows to 2% Annualized Rate in Third Quarter

U.S. Economy Growth Slows to 2% Annualized Rate in Third Quarter

The U.S. Commerce Department announced Thursday that the U.S. gross domestic product growth decelerated to an 2% annualized rate in the third quarter, down from a 6.7% rate in the April-June quarter.

It marks the slowest U.S. growth rate since the 2020 recession.

Economists polled by the Wall Street Journal had forecast GDP to slow to a 2.8% rate, reported MarketWatch. 

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“Big picture: Economists blamed the slowdown in the third quarter on fading government support for the economy, bottlenecks and the surge in cases of the coronavirus delta variant,” according to the financial website. 

Economy Details

Consumer spending rose 1.6% in the third quarter, well below the 12% rate in the prior three months.

“Households shifted spending to services, which rose 7.9% while spending on durable goods plunged 9.2% in the third quarter as new cars were scarce due to the microchip shortage,” said MarketWatch. 

Business investment rose 1.8% in the third quarter, down sharply from a 9.2% rise in the prior period. Without gains in intellectual property, business investment would have been negative.