State of the Economy
The U.S. economic news continue to impress. From Historian Heather Cox Richardson:
In March, without a single Republican vote, they passed the $1.9 trillion American Rescue Plan to jump-start the economy by putting money into the pockets of ordinary Americans. It worked. The new law cut child poverty in half by putting $66 billion into 36 million households. It expanded access to the Affordable Care Act, enabling more than 4.6 million Americans who were not previously insured to get healthcare coverage, bringing the total covered to a record 13.6 million.
As vaccinated people started to venture out again, this support for consumers bolstered U.S. companies, which by the end of the year were showing profit margins higher than they have been since 1950, at 15%. Companies reduced their debt, which translated to a strong stock market. In February, Biden’s first month in office, the jobless rate was 6.2%; by December it had dropped to 4.2%. This means that 4.1 million jobs were created in the Biden administration’s first year, more than were created in the 12 years of the Trump and George W. Bush administrations combined.
In November, Congress passed a $1.2 trillion infrastructure bill that will repair bridges and roads and get broadband to places that still don’t have it, and negotiations continue on a larger infrastructure package that will support child care and elder care, as well as education and measures to address climate change.
Bloomberg and the Wall Street Journal report that U.S. economic output jumped more than 7% in the last three months of 2021. Overall growth for 2021 should be about 6%, and economists predict growth of around 4% in 2022—the highest numbers the U.S. has seen in decades. China’s growth in the same period will be 4%, and the eurozone (the member countries of the European Union that use the euro) will grow at 2%.
The U.S. is “outperforming the world by the biggest margin in the 21st century,” wrote Matthew A. Winkler in Bloomberg, “and with good reason: America’s economy improved more in Joe Biden’s first 12 months than any president during the past 50 years….”
Most of the 4.5 million Americans who quit their jobs in November got new jobs with higher pay and better benefits.