Over the past few weeks, US inflation and supply chain headlines have been inevitable. While news on the cost of everyday items and how the COVID-19 crisis has affected supply chains is certainly reliable, there are two other economic indicators – if not talk is more important – but get less information: gross domestic product (GDP) and employment.
It may come as a surprise to some, but there’s actually a lot of positive economic news on these two fronts. In fact, the US economy has recovered faster than its peers, continues to grow at a brisk pace, and is restoring jobs lost to the pandemic much faster than anticipated.
Last year, when the pandemic hit, the United States experienced the worst recession since the immediate aftermath of the Second World War, falling 3.4% in 2020. Unemployment also hit 14.8% in April 2020, the highest level since the monthly jobs report began in 1948. Decisive action by the Biden administration through the US Rescue Plan and its historic vaccination program has accelerate the economic recovery to the point where we have not only regained all the output lost during the recession pandemic; We’ve even surpassed pre-pandemic levels, which means the economy is now bigger than it was at the end of 2019.
America is doing better
America’s recovery is extraordinary above all because it is so unusual: America is only one leading advanced economies have exceeded pre-pandemic levels, according to Organization for Economic Cooperation and Development. In fact, data from the most recent quarter shows Real GDP– GDP adjusted for inflation – about 13% larger than at the end of the COVID-19 recession.
What’s even more remarkable is that we’re recovering much faster than the last two recessions. After the end of the 2008 recession, it took 66 months, or 5.5 years, to reach about 13% of the end of the recession. After the end of the 2001 recession, it took 51 months, or more than four years, to get there. While GDP is not a comprehensive measure of happiness – excluding unpaid labor provided mainly by women, for example – it is a rough predictor of our standard of living. That means a much faster economic recovery as measured by GDP is a welcome and necessary change from past recessions.
There is much better news on the job market. Unemployment rate — which reflect people who are not working but are available and actively looking for work — have fallen much faster and faster than anticipated. Last month, the unemployment rate fell 4.6% two years ago what The National Assembly Budget Office has forecast. Claim unemployment insurance continues to improve, with the four-week moving average at its lowest level since the early days of the pandemic. Similar to GDP, employment has also recovered much faster compared to after previous recessions — jobs have returned to at least 97 percent of pre-pandemic levels, returning more than 80 percent of jobs lost to the pandemic.
American rescue plan
But this type of rapid economic and labor market recovery did not just happen by accident. This economic recovery is thanks in part purposeful fiscal policy—the American Rescue Plan—makes sure past mistakes are not repeated.
Direct stimulus checks of up to $1,400 per person, among other policy measures, helped ensure that Actual spending is at an all-time high—Not merely restoring pandemic damage, but exceeding pre-pandemic levels. Poor children have also been cut Almost half thanks to child tax credit payments. As of March 2021, when the American Rescue Plan was adopted, 4.3 million won Many people have found jobs. Salary and actual disposable income rising, especially for low-wage workers, Who is incommensurate women and people of color and who have had steady pay increases since April 2021.
Need more work
Despite this progress, more work is needed. While we’re not out of the woods yet, the best short-term economic policy is still getting more people vaccinated. But we don’t just want to go back to the way it was — we have to make up for the decades stagnant salary, a cost-of-living crisis where many households struggle to cover basic necessities such as childcare, housing, health care, and economic inequalities gender and race.
The economy has Not have made a full recovery and have not yet reached full employment — we have not yet 5.5 million to 8.2 million jobs taking into account pre-pandemic trends. Most importantly, the unemployment rate 4.6% hide the truth that many women and men of color, as well as people with disabilities, experience much higher rates of unemployment. Too many people are still out of work, especially workers who face racial, sexist and structural discrimination in the labor market.
While we have learned from our past mistakes in previous recessions by ensuring GDP and unemployment recover quickly, we must learn from past recoveries. We can’t leave anyone behind, especially women, people of color, and people with disabilities. Continuing economic growth is a proven strategy to raise wages and ensure inclusive growth.
That’s why it’s important for the Senate to pass the Building Better Back Act, which will help ensure people can get back to work and keep working, and at the same time enhance economic growth. Failure to pass the Build Better Back Act puts our historic recovery at risk. Despite the barrage of negative economic headlines, the US recovery trajectory is too favorable for workers and growth in general to withdraw support for now.
Rose Khattar is deputy director of analysis and rapid response at the Center for American Progress and Andres Vinelli is vice president for economic policy at the Center for American Progress.
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