Скачать или смотреть Economy Statement by Catherine Wolfram, Acting Assistant Secretary for Economy Policy

Economy Statement by Catherine Wolfram, Acting Assistant Secretary for Economy Policy, for the Treasury Borrowing Advisory Committee.
November 1, 2021.

The U.S. economy grew rapidly during the first half of this year, bringing the level of real GDP above the pre-pandemic level by the second quarter. However, the pace of real GDP growth slowed in the third quarter, in large part due to supply-side disruptions that have been exacerbated by the persistence of the pandemic. Notably, the late-summer surge in domestic cases of Delta variant COVID-19 and the wind-down of federal fiscal aid were less pronounced headwinds for the economy. Household demand for pandemic-sensitive services – such as transportation, recreation, and food services and accommodations – continued to recover in the third quarter, while strong wage growth and excess savings built during the pandemic mitigated economic drag from lower federal pandemic-related transfers.

Meanwhile, U.S. labor markets saw strong payroll job growth in the third quarter and further reductions in #unemployment. Firms added an average of 550,000 jobs per month, and the unemployment rate fell from 5.9 percent in June to 4.8 percent in September—the lowest rate since the first month of the pandemic in March 2020. Labor #markets also made notable progress in stemming the number of the long-term (27 or more weeks) unemployed, which fell by 1.3 million from June to September.

Inflationary pressures eased somewhat during the third quarter, but #inflation remained elevated due to multiple factors. A faster than anticipated global reopening has raised prices for gasoline, fuel oil, and electricity and natural gas services. Severe weather and labor shortages have lifted the prices of foods. Supply-chain disruptions continue to drive price growth for durable goods—particularly new vehicles. And house price appreciation during the pandemic is now filtering into rents and other shelter prices.

Overall, U.S. economic performance in the third quarter was modest. Growth should rebound in the fourth quarter and early 2022 as some factors that have held back growth – lower motor vehicle production, continued inventory drawdown, and weak export growth – turn positive. Private forecasters predict that GDP may return to trend – that is, reach the level that it would likely have grown to without the pandemic-induced recession – in 2022.

#GDP GROWTH.
According to the advance estimate released last week, real GDP rose 2.0 percent at an annual rate in the third quarter of 2021, following very strong gains of 6.3 percent and 6.7 percent in the first and second quarters, respectively. Although economic growth slowed in the third quarter, the pace is consistent with the average 2.2 percent quarterly rate seen in the five quarters prior to the onset of the pandemic in the first quarter of 2020.

Real private domestic final purchases (PDFP) – the sum of personal consumption, business fixed investment, and residential investment – grew 1.1 percent at an annual rate in the third quarter. The slowdown follows two consecutive quarters of double-digit growth which together marked the strongest growth of PDFP for any half-year since 1950—excluding the unprecedented rebound in the second half of 2020 after the initial lockdowns.

After two consecutive quarters of very rapid growth fueled by Economic Impact Payments and other federal fiscal aid, personal consumption growth slowed to a pace more consistent with pre-pandemic rates. Growth in real personal consumption expenditures (PCE), which account for about two-thirds of overall GDP, rose by 1.6 percent at an annual rate in the third quarter, following a 12.0 percent increase in the second quarter and a 11.4 percent advance in the first quarter. Even so, strong wage growth and excess household savings likely helped cushion the downward pressure on household spending from the Delta variant and the waning of federal stimulus from the first half of the year. PCE in the third quarter stood 3.5 percent above its pre-pandemic level and was close to trend; the composition, however, remains heavily skewed towards goods over services.

Purchases of durable goods – a category that includes motor vehicles, household equipment and furnishings, among other items – contracted by 26.2 percent at an annual rate, following growth of 11.6 percent in the second quarter and a surge of 50.0 percent in the first quarter. The decline in spending on durable goods mainly reflects fewer purchases of motor vehicles and parts, which fell by 53.9 percent as output at factories and inventories at dealerships have been strained by supply-chain #disruptions. Spending on nondurable goods – such as #food and beverages purchased for home, gasoline and other #energy goods, clothing, footwear, and other goods – continued to expand...

LABOR MARKETS AND #WAGES,
#PRICES,
RISKS TO THE OUTLOOK,
CONCLUSION,