U.S. Economic Growth Pace Slowed Down with Jobless Claims Reaching Pandemic Era Low

GDP growth in the world's largest economy slowed down while labor market shows signs of robust recovery

The U.S. department of labor saw a decrease in unemployment benefits claim for the fourth straight week ending on October 23, according to the U.S. Labor Department’s report released on Thursday.

Initial jobless claims stood at 281,000 compared to revised level in previous week of 291,000. The figure fell short of Bloomberg consensus of 288,0000.

The weekly metrics fell to pandemic era low since its lowest peak of 256,000 in the week ended March 14,2020.

In another metric, jobless claims are down by 95% from its peak in April 2020 which shows labor market is recovering.

U.S. Department of Commerce on Thursday released another gauge of economic activity, US GDP grew at a slower rate in the third quarter amid bottlenecked supply chain and surging inflation.

The GDP number grew 2.0% in the quarter ending on September disappointing forecast of 2.8% by Dow Jones poll. This marks a sharp slowdown from second quarter growth of 6.7%.

Key factor to the disappointing number was slower growth in consumer spending given spending accounting for two third of the nation’s economic growth.

Bottlenecked supply chain led to shortages of raw materials which lead to increased input costs to business which is generally passed on to consumers.

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