U.S. economy slows to 2 percent annual growth in 3rd quarter amid Delta surge

Hiring sign
(Image credit: Spencer Platt/Getty Images)

The U.S. economy grew at a slower annual rate in the third quarter of 2021 as the Delta variant of COVID-19 drove an uptick in coronavirus cases.

The Bureau of Economic Analysis said Thursday the economy grew at a 2 percent annual rate from July to September, down from 6.7 percent from the quarter prior, The Washington Post reports. This represented the slowest gain since the second quarter of 2020, which saw GDP plunge 31.2 percent, according to CNBC.

The numbers came after the most recent U.S. jobs report for September disappointed, with 194,000 jobs being added compared to the 500,000 expected by economists. Thursday's report showed that consumer spending grew at an annual rate of 1.6 percent in the third quarter of 2021 compared to 12 percent in the second quarter, The Associated Press reports.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE
https://cdn.mos.cms.futurecdn.net/flexiimages/jacafc5zvs1692883516.jpg

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

"The Delta wave of the pandemic did a lot of damage — it caused consumer to turn more cautious," Moody's Analytics chief economist Mark Zandi said, per AP. "The virus surge scrambled global supply chains and disrupted production in a lot of industries and also created havoc in the job market."

At the same time, with new COVID-19 cases declining, former Congressional Budget Office chief economist Wendy Edelberg told the Post that "my hope is that to the degree we're seeing bad news in the report, it is going to be temporary factors driven by Delta." Indeed, Credit Union National Association senior economist Dawit Kebede said that "as Delta cases continue to subside, there may be more growth in the fourth-quarter as consumers will be more willing to spend on services involving in-person interactions," per CNBC. Still, Kebede noted "the supply chain challenges, however, will likely continue until next year making it difficult to satisfy increased consumer demand."

To continue reading this article...
Continue reading this article and get limited website access each month.
Get unlimited website access, exclusive newsletters plus much more.
Cancel or pause at any time.
Already a subscriber to The Week?
Not sure which email you used for your subscription? Contact us
Brendan Morrow

Brendan worked as a culture writer at The Week from 2018 to 2023, covering the entertainment industry, including film reviews, television recaps, awards season, the box office, major movie franchises and Hollywood gossip. He has written about film and television for outlets including Bloody Disgusting, Showbiz Cheat Sheet, Heavy and The Celebrity Cafe.