![]() The overall size of the U.S. economy has grown by more than 5% in the last four years, with what is described as a “core inflation” lower than many countries and an exceptionally strong labor market. These are the highlighted points emphasized in a posting just released by the Department of the Treasury. Using the two-year anniversary of the American Rescue Plan as a jumping-off point, two Treasury Department officials contend that the economic recovery from the Covid 19 pandemic has occurred “much faster than after recent recessions.” Those officials, Benjamin Harris, assistant secretary for economic policy, and Tara Sinclair, macroeconomic policy deputy assistant secretary, assert that the U.S. has “performed better than other G7 countries,” with the nation’s household consumption having returned to “pre-pandemic levels by the second quarter of 2021.” Acknowledging that inflation rates have been high during the months of the pandemic recovery, Harris and Sinclair suggest that things could have been worse, pointing to longer and higher inflation in the countries of Europe, while also touting a domestic job market that has by comparison been strong. “U.S. employment has reallocated from lower wage industries to high-wage and higher productivity industries,” they write, adding that domestic employment has “also shifted to industries with higher average hours worked, implying a stronger recovery in hours relative to employment.” Such reallocation of labor, Harris and Sinclair conclude, “may drive further gains in labor productivity going forward.” By Garry Boulard
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