By Isaac Cohen*
There was justified optimism about the US economy, at the start of the summer, as demonstrated by the vigorous creation of 2 million new jobs in June and July. However, in August and September, increased contagion caused by the Delta variant of the corona virus led to the creation of only 590,000 new jobs. The Department of Commerce confirmed, last week, that US economic growth in the third quarter, ending in September, slowed down to an annual rate of 2 percent. Additionally, supply chain disruptions together with higher commodity prices, such as oil climbing from $62 per barrel in August to more than $80 last week, were generating inflationary pressures. Consumer prices increased 1.3 percent in the third quarter, or at an annual rate of 5.4 percent, while salaries also increased 4.2 percent from a year earlier, still under the inflation rate.
Federal Reserve Chairman Jerome Powell, at a virtual conference hosted by the Bank for International Settlements and the Reserve Bank of South Africa, said these disruptions “may last longer than expected” and confirmed the central bank will begin reducing the purchases of securities. Chairman Powell concluded, “I do think it’s time to taper… I don’t think it’s time to raise rates.” (The New York Times 10/23/21).
*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.