QVMS - The Many Causes Of The Rapid Slowdown In Growth In Late 2021

• Last Thursday, the Commerce Department announced that its preliminary estimate for third-quarter growth was an anemic 2%. This was partly due to the fact that consumer spending grew at only a 1.6% annual pace, down from a torrid 12% annual pace in the second quarter.
• The Commerce Department blamed the Covid-19 Delta variant, the port bottlenecks, and supply chain glitches for the abrupt deceleration in U.S. economic growth. That’s true to an extent, but inflation is now a major by-product of these product delays.
• Overall, due to the fact that big order backlogs still persist, I do not anticipate that the U.S. will slip into an “official” recession anytime soon. However, the economic problems now enveloping the world could fuel a major recession in China, Europe, and most emerging economies.

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