U. S. economic recovery hits a major roadblock

The Bureau of Economic Analysis reported Thursday that the U. S. economy grew at an annualized rate of only 2% in the third quarter.

The highly infectious Delta variant of the coronavirus, supply chain chaos, worker shortages, sluggish jobs numbers and higher prices weighed on economic activity.

It was far lower than the 2.7% economists had predicted and the slowest pace of growth since the start of the recovery, as well as a massive step down from the 6.7% rate in the spring.

The spending slowdown was more than accounted for by a slowdown in consumer spending, according to the BEA, which dropped off after the stimulus check sugar rush faded.
Although American incomes rose $47.8 billion on the back of higher wages, even as government benefits wound down, disposable income actually fell by 0.7%, or $29.4 billion.

The savings rate came down to 8.9%, compared with 10.5% in the second quarter. This helps the economy when people spend rather than save. But over the summer, consumers also spent less as confidence took a hit amid the rising Delta cases.