New signs suggest that the United States experienced a strong profit of growth for the third quarter, even though many companies have prepared their investors for the reality that their profits may not be as high as anticipated. While these profits for individual companies may not reach the initial amount they forecasted, it is still expected that many in the United States will experience an increase in profits.
While analysts and investors are waiting for the Corporate America reports — which will officially reveal data of what the third quarter consisted of — many are also already evaluating the pros and cons of what the third quarter brought. For example, global supply chain issues remain a huge problem for businesses worldwide. As the holiday season begins soon, many companies are attempting to prepare for these issues to cause a loss of sales.
The third quarter saw some of these problems come to life because of these global supply chain issues, as well as because of the Delta variant of COVID-19. The Delta variant threw a wrench in many businesses and their plans to experience mass profit growth. As the Delta variant spread and caused COVID-19 infections to skyrocket across the nation, many businesses experienced a loss of business. Now that these infections seem to be going down, this may signal that business activity could pick up again.
Many companies have already come out and prepared their investors for shortcomings for the third quarter. Nike already revealed that they are expected lower profits, for a number of reasons. Supply chain issues, an increase in freight costs, and factory closures where the company produces much of their shoes has already hurt the company — and may likely hurt the business for the holiday season and 2022.
FedEx Corp also recently announced their own third quarter (and future) problems, as labor shortages have resulted in them driving up their wages and the amount they spend on overtime spending. This may cut into the profits that they made.
For the most part, economists believe the third-quarter growth will show that the pace of growth is slowing down a bit — but it’s not going away completely. The country and many businesses are still experiencing growth, even if it is at a slower rate.
For weeks, many have suggested that the economy is slowing down, and some data has come out to confirm this. The third quarter reports may finally reveal exactly where the country and the economy stand. This economic slowdown is likely for many reasons. Consumer confidence has decreased in the past few weeks, which often means that consumers will not spend as much money at businesses.
Consumer confidence fell for a lot of reasons. The growing amount of COVID-19 cases was a huge problem. Now that cases are falling, there is every reason to suggest that consumer confidence may increase again — especially as the holiday season is nearly upon us.
Labor shortages, raw material shortages, and global supply chain issues will also consistently put pressure on the economy and keep many businesses from experiencing the amount of growth anticipated.