Economic growth rate slows to 2 percent as supply chain issues take toll

The rate of growth for the U.S. economy slowed to its fastest pandemic-era pace in the third quarter, the Commerce Department reported Thursday.

Gross domestic product, a sum of all the goods and services produced, grew at a 2 percent annualized pace in the third quarter, according to the department’s first estimate released Thursday. Economists surveyed by Dow Jones had been looking for a 2.8 percent reading. "It is not at all surprising that this GDP report was significantly lower than reported in Q2," said Steve Rick, chief economist at CUNA Mutual Group."The U.S. economy remains very volatile as we battle a global supply chain crisis, increasing inflation and a sluggish labor market. Both the supply chain crisis and ongoing pandemic have shrunk GDP growth rates around the globe."

That marked the slowest GDP gain since the 31.2 percent plunge in the second quarter of 2020, which encompassed the period during which Covid-19 morphed into a global pandemic that resulted in a severe economic shutdown that sent tens of millions to the unemployment lines and put a chokehold on activity across the country.

Declines in residential fixed investment and federal government spending helped hold back gains, as did a surge in the U.S. trade deficit, which widened to a near-record $73.3 billion in August.

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