Economic growth in the United States slowed sharply during the summer, as supply chain bottlenecks and a renewed pandemic limited activity in stores, factories and restaurants.
The US Commerce Department said Thursday that gross domestic product, adjusted for inflation, grew 0.5% in the third quarter.
That is down from 1.6 percent in the second quarter, dashing earlier hopes that the recovery would accelerate as the year progresses.
The pandemic has crippled supply chains around the world, even as many products are in high demand
On an annual basis, GDP rose by 2% in the third quarter, after it had grown by 6.7% in the second quarter.
This slowdown was partly a result of the spread of the mutated Delta coronavirus, which has prompted many Americans to back off from travel, restaurant meals and other personal activities.
More recent data suggests people are returning to those activities as virus cases decline, and most economists expect faster growth in the last three months of the year.
But another major constraint on growth may be slower to recede. The pandemic has choked supply chains around the world, even as demand for many products rises.
The resulting delays and backlogs have made it difficult for US stores and factories to get the products and spare parts they need.
Many companies are also struggling to find enough workers to make, sell and deliver products, another supply shortage hampering growth for longer than economists expected.
“The economy doesn’t have a demand problem,” said Ben Herzon, CEO of IHS Markit, an economic forecasting firm. “It has a supply problem.”
Many companies are struggling to find enough workers to make, sell and deliver products, another supply shortage hampering growth for longer than economists expected.
In some cases, these display issues lead to delayed delivery, reduced selection, and empty shelves in stores. In other cases, they lead to higher prices. Inflation rose last spring and has remained high. In government statistics, faster price increases slow inflation-adjusted growth.
However, the economy is in much better shape than experts had predicted for most of the past year. Gross domestic product returned to its pre-pandemic level in the second quarter, although it is not where it would have been had the pandemic never occurred.
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