Supply chain woes trip solid U.S. economic growth
A U.S. economy growing at a healthy pace could be even more robust. GDP jumped at a 6.5% annualized rate in the second quarter, according to an initial estimate here from the Commerce Department, compared with an 8.5% projection from economists surveyed by Reuters. Supply chain constraints weighed on the expansion.
The bump spurred output to above pre-pandemic levels. Still, the economy isn’t meeting its full potential. The U.S. trade deficit here grew by 3.5% from May to June to $91.2 billion, with imports of food and industrial products leading the way. Supply bottlenecks had caused lumber and other goods prices to skyrocket.
The boost from $1,400 individual government stimulus checks in March also largely disappeared. Disposable personal income fell 26% in the second quarter while savings fell by half. Economists expect 7% growth this year, which would be the strongest pace since 1984. But shortages in certain goods could keep it from roaring even louder.
Source: Reuters (Reporting by Gina Chon)