Americans start buying more, while inflation worsens things
Americans started to buy more, making the country's economy more stable. Still, rising inflation for all types of goods and services risks worsening the positive growth rate.
According to the AP agency, referring to the U.S. Department of Commerce data, American consumer spending has increased by 1.3%. Meanwhile, consumer prices have risen by 5%, accelerating inflation to break the record of 30 years ago.
The strong increase in spending in October, analysts say, is a promising indication that overall economic growth, which has slowed to a moderate annual rate of 2.1% between July and September 2021, will lead to a significant recovery in the final quarter of the year.
“After experiencing one of the most severe economic shocks of the past century in 2020, the U.S. economy has displayed one of the most rapid recoveries in modern history in 2021,” Gregory Daco, chief U.S. economist for Oxford Economics, wrote in a note to clients. He believes that by the end of the year, U.S. GDP will rebound to 5.6%.
It is also worth noting that the number of applications for unemployment benefits has started to decline. Last week it dropped by 71.000, totaling only 199.000 requests. This is the record number since 1969.