- US Economy grows only 2% in Q3
- Jobless claims drop to pandemic low
US indices continue to trade at record levels despite a disappointing economic report on Thursday. GDP growth for the third-quarter came in at 2.0%, below the 2.8% expected. The reading marks a slowdown from 6.7% growth in the second quarter. It is the weakest growth of pandemic recovery as an infusion of government stimulus continued to fade and a surge in COVID-19 cases and global supply constraints weighted on consumption and production. Thursday’s report showed that consumer spending slowed to an annual growth rate of just 1.6% from July through September, after a robust 12% annual rate in the second quarter. Shortages, transportation bottlenecks, rising prices and the Delta variant of the coronavirus weighed on both goods and services spending. However, with confirmed COVID cases declining, vaccination rates rising and more Americans venturing out to spend money, many economists believe that GDP will bounce back to a rate of 6% or even better in the current fourth quarter.
The U.S. economy grew at its slowest pace in more than a year in the third quarter. Source: Bloomberg via ZeroHedge
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Create account Try a demo Download mobile app Download mobile appOn a more positive note for the economy, weekly initial jobless claims came in at 281k, while analysts were expecting 290k claims. Continuing jobless claims also fell to their lowest level since the COVID-19 crisis began, dropping to 2.481 million as of early October. Today's report suggest that the labor market slowly recovers to its pre-pandemic normal amid a surge in demand for labor, the expiration of enhanced jobless benefits, and record levels of job openings and quits by employees. Businesses are spending more on equipment and wages are increasing as employers struggle to draw more people back into the job market. A resurgence of consumer spending could help energize the economy as the year nears a close. At the moment, the number of new filings still remains well above the 212k figure seen back in early March 2020, just before the COVID-19 crisis hit the US economy.
Initial jobless claims number reached the lowest level since March 14. Source: US Department of Labour
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