The U.S. economy grew at a seasonally adjusted annual rate of 2.0% in the third quarter, its lowest reading of the recovery, and lower than the 2.8% estimated by analysts. Supply chain issues as well as the Delta variant were blamed for the reduction in growth.
A nation’s gross domestic product, or GDP, is calculated by adding all the money spent by consumers, businesses and government in a given period. GDP is a key guide for policymakers and businesses in strategic decision making. The data is calculated on either a nominal basis or a real basis, which accounts for inflation.
The lower U.S. number was mainly due to a reduction in consumer spending, which accounts for nearly 70% of the U.S. economy, rose just 1.6%. A 26.2% decline for autos and appliances jarred spending for goods, which fell 9.2%
Following the pandemic, U.S. GDP fell 5.1% in the first quarter, 2020, then nosedived 31.2%in the second quarter, before staging a historic 33.8% recovery in the third quarter. Since then, GDP has risen 4.5%, 6.3% and 6.7% in the subsequent quarters.
Meanwhile, north of the U.S., Canada reduced its GDP annual growth to 5.1% from 6.0%. In a surprise move, however, the central bank ended its quantitative easing program, stating inflation expectations are higher than originally expected. The Bank of Canada also hinted an interest rate hike could come earlier than anticipated. Canada was one of the first nations to begin to taper bond purchases, back in April
