US GDP increases 2.3% in Q3

US gross domestic product increased at a 2.3% annualised rate in the third quarter, according to the Commerce Department, with the economy on track to record its best full-year performance since 1984 despite an increased level of Covid-19 infections throughout the period.

However, while the final print was an upward revision to the 2.1% rate estimated in November, the reading was still the slowest pace of growth seen since the second quarter of 2020.

The revision mainly reflected a modest increase in consumer spending and business inventory investment than previously estimated, which partially offset a downward revision to exports.

The pace of quarterly growth was impacted by shortages of motor vehicles, as well as a decline in pandemic relief money from the government and Hurricane Ida.

Economists expect full-year GDP growth to come in at 5.6% in 2021 after the economy contracted 3.4% in 2020.

However, increased coronavirus infections throughout the winter, driven by the Delta and Omicron variants, were expected to significantly hinder growth in the first quarter of 2022.