ECONOMIC GROWTH SLOWS TO A TRICKLE
The latest numbers are in. Last quarter, the U.S. economy grew at a meager 2.0% annualized rate.
In most years, this would be a respectable growth rate. But we’re calling it meager this time because it’s the smallest increase since the start of the recovery. To give you a brief refresher, the economy shrank by 5% in the first quarter of 2020, when Covid-19 first began to spread. It then contracted by 31.4% in the second quarter of last year. As in, it became one third smaller over a three-month span. It rebounded after that and had since stayed in the positive range.
But that growth is slowing. At the start of the quarter, the consensus view was that the economy would expand by 7.0%. As the three-month period dragged on, economists revised expectations downward. A Wall Street Journal poll, for example, anticipated 3.1% economic growth in the third quarter. Dow Jones analysts forecasted a 2.8% rise. But ultimately, even those predictions proved too optimistic.
This low growth can mostly be attributed to consumer spending dropping off. This facet of the economy contributes roughly two thirds of GDP, and as it goes, so goes the country’s economic health. In the third quarter of 2021, consumption rose by a paltry 1.6% (compared to 12% in Q2).
Spending on consumer goods fell by 9.2%, including a 26.2% drop in durable goods like home appliances or cars. Services spending was also down, growing by only 7.9% compared to 11.5% in the prior quarter. Exports were down while imports were up. New construction slowed. Auto production decelerated to a trickle. The biggest upside was slower inventory drawdowns (or, you know, business stockpiling, depending on how you want to look at it.)
It’s opening the door to another problem. Inflation rose to 5.4% in September, reducing consumer’s purchasing power and in turn making them hesitant to start, well, purchasing again.
You may be sensing a theme after reading the previous couple of paragraphs. And you’d be right. According to reports, the culprit behind all the mediocre economic activity is…persistent supply chain problems!
That’s right. Constricted chip production, port chaos, the lack of equipment and warehouse space is showing up in national economic data.
And guess what the issue behind that is? Yes friends, it’s the labor shortage. A lack of qualified, motivated people. This applies to longshoremen, warehouse workers, factory employees, and… you guessed it, truck drivers! There just aren’t enough people to keep up with the level of demand right now, and it’s slowing everything down.
We in the trucking world can do something about this situation. We can offer competitive pay and benefits, and we can make driver engagement a priority. We can make sure that the men and women in the seat feel respected and appreciated. If ever there was a time to make the job as appealing as possible, it would be now.
That’s not to say that hiring drivers alone will fix the floundering economy. It won’t. But it could help. Let’s use our power for good and do all we can to work toward a fix to this problem.