Overcoming obstacles is a part of any development process. Without addressing the most challenging issues, it is impossible to make progress and become successful. The US is considered to be the leading economic power. The obstacles it faces are equally sweeping, but its economic model has proven its effectiveness more than once.
The US economy that weathered multiple crises managed to recover even from the Great Depression. This means that it will definitely come through today's problems. Currently, the world's largest economy has stalled slightly on its road to full recovery from the pandemic-induced headwinds. A new strain of COVID-19, supply chain disruptions, labor shortages, and rising inflation are hampering economic growth. For instance, the US economy grew at a disappointing 2% annual rate in the third quarter. Despite all this, the authorities continue to provide support to the population. Thus, personal income in the United States grew by $47.8 billion thanks to higher wages and government subsidies.
Notably, Americans have become more frugal. Lately, they have been spending less money on consumer goods, especially cars and services. Therefore, restaurants and hotels are suffering losses. However, experts agree that the situation will improve in the next quarter. “We are confident that the fourth quarter will be much better,” James Knightley, chief international economist at ING, said.
The global chip shortage and the aftermath of Hurricane Ida also had a severe negative impact on US manufacturing activity. Thus, its factory production unexpectedly fell by 0.7% in September. The automotive industry suffered the most. Production at auto plants tumbled by 7.2%. Moreover, labor shortages and supply chain problems will continue to weigh on the country's manufacturing output in the coming months and quarters, analysts are confident.
