A resurgence of consumer spending could help energize the economy as the year nears a close.Īt the same time, though, rising prices, especially for gasoline, food, rent and other staples, are imposing a burden on American consumers and eroding the benefits of higher wages. “People are feeling a lot more at ease about moving about.”Īirlines have reported growing passenger traffic, businesses are investing more and wages are increasing as employers struggle to draw more people back into the job market. “The key story right now is the improving health situation,' said Gregory Daco, chief U.S. Many economists think GDP will rebound at a solid annual growth rate of at least 4% this quarter.
Such inventory rebuilding added 2.1 percentage points to the quarter's modest expansion.īy contrast, consumer spending, which fuels about 70% of overall economic activity, slowed to an annual growth rate of just 1.6% after having surged at a 12% rate in the previous quarter.Įconomists remain hopeful for a bounce-back in the current October-December period, with confirmed COVID cases declining, vaccination rates rising and more Americans venturing out to spend money.
The 2% annual growth last quarter fell below expectations and would have been even weaker if not for an increase in restocking by businesses, which added whatever supplies they could obtain.
