National 2.3% growth rate in Q3 up from earlier estimate

WASHINGTON — The U.S. economy grew at a 2.3 percent rate in the third quarter, slightly better than previously thought, the Commerce Department said Wednesday. But prospects for a solid rebound going forward are being clouded by the rapid spread of the latest variant of the coronavirus.

The third and final look at the performance of the gross domestic product, the nation’s total output of goods and services, was higher than last month’s estimate of 2.1 percent growth.

The strength came primarily from stronger consumer spending than what was previously thought, as well as businesses rebuilding their inventories more than initial estimates revealed.

The 2.3 percent third quarter gain follows explosive growth that began the year as the country was emerging from the pandemic, at least economically. Growth soared to 6.3 percent in the first quarter and 6.7 percent in the second quarter. The emergence of the delta variant in the summer was blamed for the third quarter slowdown.

Now with the appearance of the omicron variant, coming on top of high inflation and lingering supply chain issues, there are concerns that growth could be constrained heading into 2022.

“History is repeating itself with the COVID virus suddenly reappearing and dampening economic growth prospects,” said Sung Won Sohn, an economics and business professor at Loyola Marymount University.

Economists expect growth this year to come in around 5.5 percent, which would be the best showing since 1984 and a reversal from last year when the economy shrank by 3.4 percent.

It is the uncertainty of what is to come that is now concerning economists.

“The omicron variant poses a downside risk in the near term as do supply-chain disruptions and shortages that could be a constraint for households and businesses over coming months,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.