A new report has just been released about the health of the U.S. economy, and it is disappointing, to say the least.
According to Fox News, that report from the U.S. Commerce Department shows that the U.S.’s gross domestic product (GDP) for the second quarter was below expectations.
Experts were expecting the second-quarter GDP to come in at around 8.5 percent, although some experts had predicted an even higher percentage, such as around 10 percent. But, according to the Commerce Department’s report, it only reached 6.5 percent.
And, to add insult to injury, the Commerce Department revised the first-quarter GDP down from 6.4 percent to 6.3 percent. So, it’s bad news all around.
GDP is the broadest measure of economic performance: it is America’s total output of goods and services. The percentage given is the annual rate of growth of the GDP.
From a quarter-by-quarter perspective, in 2021, the U.S. GDP, so far, has grown by 1.5 percent in the first quarter, i.e. January through March, and 1.6 percent in the second quarter, i.e. April through June.
What is going on?
If you go to a mainstream media site, then you are likely to find a columnist putting a positive spin on the 6.5 percent growth in the second quarter. One site, for example, called it “a solid gain that fell short of some expectations.”
What such a viewpoint deemphasizes, however, is that we are coming out of a pandemic – a pandemic that virtually shut the U.S. economy down. Accordingly, growth is to be expected. But, as stated, the second quarter’s growth failed to meet expectations.
So, the question is what is holding this growth back?
As Fox News explains, there is a combination of factors contributing to the problem here, including supply-chain issues caused by the shutting down of factories to slow the spread of the coronavirus and a lack of labor caused, at least in part, by the extended unemployment benefits offered by the Biden administration in the $1.9 trillion coronavirus spending package.
This situation has also resulted in inflation that is at a 13 year high.
The Biden administration, nonetheless, continues to argue that all of this is nothing more than a “transitory” situation and that the U.S. economy is coming around. Polls would seem to suggest, however, that Americans are becoming less and less convinced that this is actually the case.