US growth rate slows to 2% on Delta surge, supply chain worries

US economic growth slowed more than expected in the third quarter to the softest pace of the pandemic recovery period as snarled supply chains and a surge in Covid-19 cases throttled spending and investment. 

Gross domestic product expanded at a 2 per cent annualized rate following a 6.7 per cent pace in the second quarter, the Commerce Department’s preliminary estimate showed Thursday. 

The deceleration reflected a sharp slowdown in personal consumption, which grew at just a 1.6 per cent pace after a rapid 12 per cent jump in the prior period. 

Shortages, transportation bottlenecks, rising prices and the delta variant of the coronavirus weighed on both goods and services spending. 

The me­dian forecast in a Bloomberg survey of economists called for a 2.6 per cent increase in GDP. US stock index futures held gains, while the dollar fell and Treasury yields rose. 

The latest data underscore how unprecedented supply constraints are holding back the US economy.