The U.S. economy grew at its slowest pace in more than a year in the third quarter, with a reopening surge in activity quickly starting to fade.
Source: U.S. Department of Commerce.
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The annualized U.S. GDP quarter-over-quarter increased by 2.0% in Q3, lower than the expected 2.6%, and significantly lower than 6.7% posted in Q2.
The slowdown in economic activity matches with the resurgence in Delta variant-related COVID-19 cases in the July through September quarter.
Positive impacts from stimulus checks and other relief posted by the government earlier this year also deteriorated. Supply chain challenges hampered the ability of firms to cope with consumer demand.
Consumption slowed down to 1.6% in the third quarter, to post the weakest pace since the second quarter of 2020.
Other components of GDP were also low for the third quarter. Net exports contributed to the drag of the headline GDP and dropped 1.1 percentage points from the core rate, due to the widening trade deficit.