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The U.S. economy recovered from the pandemic-induced recession but faced additional obstacles from inflation, supply chain disruptions, labor shortages, and the Delta variant in the last six months or three quarters. This report will summarize Real GDP, unemployment, CPI, PPI, industrial output, and consumer confidence. It will also explore how these variables affected the U.S. economy and what it projects for the next six months.


Real GDP

Third quarter 2023 GDP growth in the United States was 2.9% annually, up from 2.1% in the previous quarter and 1.5% in the first quarter. Consumer spending, corporate investment, and net exports played significant roles in the expansion, but government expenditure and residential investment decreased (Rabouin, 2023). Third-quarter GDP growth was revised to a mild 3.5 percent from 3.2 percent, as robust labor market conditions, vaccine availability, and fiscal stimulus boosted the economy.


The U.S. unemployment rate increased to 3.8% in August 2023 from 3.5% in July, higher than market projections of 3.5% and the highest rate since February 2022. Although employment levels climbed by 222,000 to 161.484 million, jobless individuals increased by 514,000 to 6.355 million (Seal, 2023). Labor force participation rose to 66.8% from 66.7% in July. A rise in COVID-19 instances attributable to the Delta variation stifled recruiting activities in various industries, mainly the leisure and hospitality sectors, thus increasing the jobless rate.

Consumer Price Index

The CPI for all urban consumers grew 0.4% in September 2023, seasonally adjusted, and gained 3.7% over the prior 12 months, not seasonally adjusted. Excluding food and energy, the All Items Index rose 0.3% in September (SA) and 4.1% annually (NSA) (U.S. Bureau of Labor Statistics, 2023). Energy commodities (up 2.2%), housing (up 0.5%), and eating away from home (up 0.5%) were the primary factors in the month-over-month rise in the CPI (U.S. Bureau of Labor Statistics, 2023). Although it was below August’s 3.8% rate, the annual inflation rate was still much over the Federal Reserve’s 2% target.

Producer Price Index

Seasonally adjusted final demand PPI rose 0.5% in September 2023 and 2.2% for the year (unchanged). Final demand goods prices grew 0.9%, and services gained 0.3% (, 2023). Energy products were up 3.3%, trade services were up 0.5%, and transportation and warehousing services were down 0.4%, driving the monthly PPI growth (, 2023). The annual producer inflation rate rose from 2.1% in August due to supply chain disruptions and intense demand pressures.

Industrial Production

The Federal Reserve said that manufacturing production in the United States rose by 1% in July 2023 after two consecutive months of decrease. Several auto manufacturers shortened or canceled their July shutdowns to compensate for prior production losses, leading to an 11.2% rise in motor vehicle and components output (Seal, 2023). The production of factories rose by 1.4%, the output of mining by 1.2%, and the output of utilities by 0.5%. Industrial capacity utilization grew 0.7 percentage points to 76.1%, below its long-term average of 79.6%.

Consumer Confidence

The Conference Board Consumer Confidence Index reached 129.1 in June 2023, up from 117.5 in May and the highest since January 2022. The Current Situation Index, which assesses consumers’ business and labor market perceptions, rose from 144.3 to 157.7 (Pitcher, 2023). The Expectations Index, which evaluates consumers’ short-term income, company, and labor market expectations, rose from 100.9 to 108.5 (Whallen, 2023). Consumer confidence rose as pandemic restrictions were lifted, the economy reopened, and vaccine efforts progressed.

Based on these indicators, the United States economy recovered from the slowdown brought on by the Delta variation in the summer and is currently on course to achieve an appropriate growth rate in 2023. Despite significant adverse risks and uncertainties, the economic forecast for the next six months is optimistic. Some examples include The Federal Reserve, which may decide to tighten monetary policy sooner than planned if rising inflation persists and harms consumers’ ability to make purchases and their confidence in the economy. A loss in vaccination effectiveness or a rise in vaccine reluctance might have severe consequences for public health and economic activity caused by the development of new COVID-19 variations. The possibility of more delays in the supply chain, which might slow manufacturing and delivery and add to inflationary pressures, is also a significant risk. There is a fiscal cliff threat if Congress fails to raise the debt ceiling or enact the bipartisan infrastructure plan and the social spending package, which could undermine corporate and consumer confidence and cut government expenditure.

Therefore, although the U.S. economy has demonstrated endurance and strength throughout the epidemic, it will undoubtedly encounter challenges and obstacles in the near future. A sustainable and balanced recovery requires cautious and adaptable policy responses and public-private collaboration and coordination.

References (2023, September). United States Producer Price Index | Economic Indicators | CEIC.

Pitcher, J. (2023, June 27). Consumer Confidence Rises to 17-Month High. WSJ.

Rabouin, D. (2023, September 11). Three Reasons a U.S. Recession May Be Delayed, Not Averted. WSJ.

Seal, D. (2023, November 15). Goodyear to Explore Strategic Alternatives for Chemical Business, Dunlop Brand. WSJ.

U.S. Bureau of Labor Statistics. (2023, October). CPI Home : U.S. Bureau of Labor Statistics.

Whalen, J. R. (2023). Why the Consumer Confidence Engine Is Sputtering – Your Money Briefing – WSJ Podcasts. WSJ.

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