What GDP, Growth Data Can Tell About US economic Recovery

The US economy grew faster than expected in the third quarter of 2021 at 2.3%, up from an estimate of 2.1%.  The third-quarter growth in America’s total output in goods and services significantly slowed from the first two quarters where growth soared to 6.3% and 6.7% respectively.

GDP growth is adjusted for inflation, which has also soared this year – the Consumer Price Index was up 6.8% in November over last November.  The emergence of the delta variant was blamed for the slowdown in Q3, which runs 1 July thru 30 September.

America’s economy expanded at an annualized pace of 2.3 percent in the third quarter, up 0.2 of a percentage point from earlier preliminary estimates and beating economists’ expectations, according to revised data from the Commerce Department.

The updated economic growth figures, released Dec. 22, show that the U.S. economy grew faster in the third quarter than the Commerce Department’s prior “advance” projection of 2.1 percent, largely on the back of an upward revision to personal spending and private inventory investment.

Consensus forecasts expected the agency’s third and final revision to show the economy grew at a 2.1 percent pace.

The final third-quarter GDP number was sharply lower than the 6.7 percent pace of growth in the second quarter, with the Commerce Department blaming the Q3 deceleration on a slowdown in consumer spending as a resurgence of COVID-19 cases sparked new restrictions and business reopening delays.

Economists are generally predicting a solid rebound in the final quarter of the year, as long as high inflation and a rise in COVID-19 cases don’t dampen economic activity.

In less than a month’s time, the swift and dramatic emergence of the Omicron variant has created a higher level of risk and uncertainty for the economic recovery.

And with the spread of the Omicron variant and lingering supply chain issues, there are concerns growth could slow again heading into 2022. On Wednesday, President Biden convened a meeting of his supply chain disruptions task force virtually and in-person in Washington, where he touted what he said was significant progress in alleviating bottlenecks at the ports and other issues that had created shortages of goods and contributed to higher prices for consumers.

Biden said that retail inventories are up 3% from last year and on-shelf availability for products is at 91%, close to where it was before the pandemic.

‘Packages are moving. Gifts are being delivered. Shelves are not empty,’ Biden said.

The faster-than-expected growth for Q3 came as consumers spent more than what was previously thought and businesses were able to rebuild inventories more quickly.

And if consumers fear inflation will get worse, they tend to spend more cash in the short term knowing it will be less valuable in the future, swelling GDP in the short term and further causing inflation.

The faster-than-expected growth for Q3 came as consumers spent more than what was previously thought and businesses were able to rebuild inventories more quickly than what was thought

Wednesday’s report showed that consumer spending, which accounts for two-thirds of economic activity in the US, was up 2% in the third quarter, down from a 12% surge in the April-June quarter.

Economists expect GDP growth to come in about 5.5% this year, which would be the fastest growth since 1984 and would reverse last year when the economy shrank by 3.4% as 22 million jobs were wiped out.

Biden made the comments during a meeting with his Supply Chain Disruptions Task Force, a group of corporate CEOs and administration officials that was established in June to address the issue. The White House says the task force has made “significant progress to alleviate bottlenecks that are rooted in the global pandemic.”

 “The much-predicted crisis didn’t occur,” Biden said. “Packages are moving, gifts are being delivered, shelves are not empty.” Despite the disruptions in the supply chain, Biden said that shelves at grocery and drug stores are stocked at 90% of their full capacity – compared with 91% before the pandemic shutdown a broad swath of the nation’s economy.

Bureau of Labor Statistics survey says the San Diego metro area spent an average of $4,579 on entertainment last year. That ranks them No. 5.

Last year during the pandemic San Diego residents spent approximately $4,579 on entertainment, says a Consumer Expenditure Survey by the Bureau of Labor Statistics.

The San Diego metro region ranked fifth in overall spending on entertainment out of 22 major metro areas based on an analysis of the data by Namechk.com. The report ranked locations based on how much of an average consumer’s annual spending went toward entertainment in 2020.

Entertainment, as defined by the bureau’s survey, includes audio and visual equipment and services; pets; fees and admissions; toys, hobbies, and playground equipment; and other entertainment spending. Anything from the bicycle you bought to the movies you rented in lieu of going to the theater counts.