US economic growth moderates slightly in the third quarter

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Port of Los Angeles, USA

WASHINGTON (Reuters) – U.S. economic growth slowed dramatically in the third quarter amid a rise in Covid-19 infections, the U.S. government confirmed on Wednesday, but activity has since picked up, which has dented the economy since 1984. To record his best performance. this year.

GDP grew at an annual rate of 2.3%, the US Commerce Department reported in its third reading of GDP growth for the months of July-September.

The reading was up from an estimated 2.1% pace last month, but it is still the slowest since the second quarter of 2020, when the economy suffered a historic contraction in the wake of tough restrictive measures to contain the first wave of coronavirus cases. fell.

Economists polled by Reuters projected GDP to grow at a pace of 2.1% in the third quarter, without revision. The economy grew at 6.7% in the second quarter.

The slow pace of growth last quarter reflected pressure on global supply chains as well as vehicle shortages amid a decline in funding provided by the US government for pandemic relief to businesses, households and state and local governments. ,

Growth was also interrupted by Hurricane Ida, which devastated energy production off the US coast in late August.

However, the economy picked up. Consumer spending grew solidly in October and the manufacturing sector boomed. The trade deficit narrowed dramatically in October, with exports at record levels and companies steadily replenishing their stocks. The unemployment rate is 4.2%, a 21-month low.

According to a Reuters poll of economists, US growth could reach 5.6% this year, the fastest pace since 1984. In 2020, the economy shrank by 3.4%.

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But the wave of coronavirus infections in the North American winter, driven by the delta variant and the highly contagious Micron, could significantly limit growth from the first quarter.

Growth prospects were also hit by Democratic Senator Joe Manchin’s announcement on Sunday that he would not support US President Joe Biden’s $1.75 trillion domestic investment package.

(by Lucia Mutikani)

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About the author: Sarah Gracie

Sarahis a reporter covering Amazon. She previously covered tech and transportation, and she broke stories on Uber's finances, self-driving car program, and cultural crisis. Before that, she covered cybersecurity in finance. Sarah's work has appeared in The Wall Street Journal, Bloomberg, Politico, and the Houston Chronicle.

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