#Economy #Wasnt #Supposed #Good
Key takeaways
- Despite the devastating impact of the pandemic, the U.S. economy is now growing faster than forecasters expected before the emergence of COVID-19.
- Resilient consumer spending and employer hiring have helped push the economy through every bump in the road.
- Economists are optimistic about continued growth in the near term.
The economy is doing better than almost anyone thought a few years ago, even exceeding pre-pandemic expectations.
A third-quarter GDP report released Wednesday highlighted the U.S. economy’s rapid recovery from the pandemic and the explosion of high inflation that followed. The 2.8% annual growth rate was lower than economists had expected just before the report was released, but much higher than forecasters had expected four years ago.
In January 2020, forecasters at the Congressional Budget Office expected the economy to grow at an annual rate of 1.6% between 2023 and 2024. Instead, after falling during the pandemic, economic growth has returned strongly and surpassed the previous high water mark.
“Overall, the US economy remains surprisingly strong with growth much higher than anyone would have expected six months or a year ago, inflation low, consumers very strong, and business investing at a high rate,” said Jason Furman, professor of US economics. Harvard University economist and former chief economic adviser to President Barack Obama, posted on social media platform X.
Despite some bumps in the road, the most important parts of the economy have weathered every storm since the pandemic hit. Consumers continued to spend and businesses continued to hire. Inflation has fallen to near pre-pandemic levels.
In 2022, many forecasters expect the economy to slide into recession with unemployment rising, as the Federal Reserve raises borrowing costs to combat inflation. Instead, the unemployment rate hit a 50-year low last year and has risen only modestly since then.
Many economists have become optimistic about future prospects.
“Unless we get a shock, a recession is unlikely for us,” Oren Klachkin, financial markets economist at Nationwide, wrote in a commentary.
#Economy #Wasnt #Supposed #Good
