The US economy grows more than expected in the third quarter

The US economy grew at an annual rate of 2.3% in the third quarter of the year, slightly better than initially estimated, the Commerce Department reported. However, there are some doubts about the prospects for a rapid rebound due to the emergence of the contagious omicron variant of the coronavirus.

The gross domestic product of the United States —the total production of all goods and services originating in the country— was higher in the July-September period than the estimate made last month of 2.1%.

The good performance was mainly due to higher-than-expected consumer spending and a higher increase in inventories by businesses.

The trend comes after skyrocketing growth earlier this year, when the US economy began to recover from the pandemic. Growth was 6.3% in the first quarter and 6.7% in the second, but the rally cooled in the summer as the delta variant of the coronavirus emerged.

Now that the new omicron variant has emerged, in addition to higher inflation and supply chain disruptions, the future economic outlook looks more uncertain.

Such fears have sparked violent ups and downs in the stock market, although the belief that omicron risks will be manageable prompted a 560-point rally in the Dow Jones industrial average on Tuesday.

However, several economists believe it is too early to totally dismiss the threats posed by the new variant.

“History repeats itself: the COVID virus is making a comeback and frustrating the economic outlook,” said Sung Won Sohn, an economics professor at Loyola Marymount University.

The Oxford Economics firm lowered its economic growth forecast for the current quarter, from 7.8% to 7.3%, although it would still be a considerable increase over the third period figure.

Kathy Bostjancic, an Oxford economist, said not only COVID-19 but also the low chances of President Joe Biden’s public investment plan being approved have led the firm to lower its economic growth projections.

Consumer confidence

US consumer confidence improved more than expected in December, as inflation concerns faded, and despite the rapid spread of the omicron variant of the coronavirus, according to the Conference Board index released Wednesday.

The index rose to 115.8 points from 111.9 units in November, a figure that was revised upwards.

This result is better than expected by analysts, who expected an index at 111.5 points.