While the world balks at America’s failed response to a coronavirus pandemic that’s infected more than 12 million Americans and left 260,000 dead, their economic management may yet prove to be superior. Other countries have done a reasonably solid job in containing the virus but that doesn’t mean they are better placed for the future.
Unemployment raged much higher in the US, peaking at 14.7 percent in April, the highest level since the Great Depression. A more flexible labor market allowed companies to shed workers to survive and to be more agile in re-organizing for the recovery. The government softened the blow for workers by topping up unemployment benefits.
America has bounced back from a historic contraction in both GDP and employment more quickly than anyone imagined. Out of the 22.2 million jobs lost due to the pandemic, 12 million have been recovered despite a record wave of corporate bankruptcies. The unemployment rate has sunk to 6.9 percent. Hiring plans of small businesses are back to all-time highs.
Gains in jobs and hours worked is supporting incomes and consumption, helping the economy grow without more fiscal support. Personal consumption expenditures are just 2 percent below the pre-pandemic level. Consumer spending