US economy has its worst growth since the recovery in September

The US economy grew at an annual rate of 2% in the July-September period, its worst performance since the post-pandemic economic recovery began last year, the government reported.

The report issued by the Department of Commerce indicates that the Gross Domestic Product (GDP) —the totality of goods and services produced by a country— decreased markedly with respect to the performance of 6% or more that it had been registering in the last two quarters.

However, many economists predict that the current quarter will show a pronounced peak, as vaccination campaigns are succeeding, COVID-19 cases are declining, and many people are returning to shop, eat out, and travel.

Airlines have been reporting an increase in passengers, businesses are investing more in equipment, and wages are picking up as a reflection of companies’ efforts to attract workers. If consumer spending recovers, the economy could rebound sharply by the end of the year.

At the same time, however, higher prices – especially for rent, food and gasoline – are putting pressure on the public and undermining the potential for wage increases. Inflation has become a subject of consternation for the Federal Reserve (Fed), which has signaled its intention to gradually reduce its economic stimulus measures.

The report of Department of Commerce, the first of three estimates of last quarter’s GDP, shows that consumer spending had an updated annual growth of just 1.6% between July and September, compared with 12% in the previous quarter.

Opinion polls show growing public concern about inflation. Some economists, like Fed Chairman Jerome Powell, insist that inflation is only a transitory phenomenon, mainly due to disruptions in supply chains that in turn respond to the suddenness of the economic recovery. Others fear that it is a more permanent trend.

Meanwhile, Democrats in Congress in Washington are trying to get the approval of two huge economic initiatives: one to modernize the country’s infrastructure and another to strengthen social welfare systems such as health care, child care and measures to curb global warming. .

The estimate for the last quarter was even lower than that mentioned by economists, who attribute the phenomenon to the persistence of the delta variant of the coronavirus and the reluctance of the public to go shopping, eat in restaurants, go to the theater and travel.