10/29– Weekly Economic Highlights

Real US gross domestic product (GDP) growth decelerated in the third quarter amid widespread supply chain disruptions and a surge in the Covid Delta variant. According to the advance estimate, third quarter GDP grew at an annualized rate of just 2.0% in the third quarter, below expectations for 2.6% growth. This follows a much stronger pace of growth in the first half of this year, with first and second quarter annualized GDP growth up 6.3% and 6.7%, respectively. Over the past few months, expectations for GDP growth through year-end have moderated, but the consensus forecast for full year 2021 GDP growth is 5.7%, which is still much higher than forecasters were initially expecting. Heading into the year, the consensus forecast called for GDP growth of just 3.9% in 2021. While supply chain issues are likely to persist over the near- to intermediate-term, virus infection rates have declined and vaccination rates continue to improve. GDP growth is expected to reaccelerate in the current quarter. The consensus forecast calls for 4.9% GDP growth in the fourth quarter. Looking further ahead, the consensus estimate calls for 2022 US GDP growth of 4.0%, which would remain well above the long-run average annual growth rate of about 1.8%.

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