- Despite declining views of the economy, America’s recovery is stronger than others – much.
- The United States is the only member of the G7 group of rich nations that has a larger economy now than before the pandemic.
- America provided much more stimulus during the crisis than other advanced economies, which made the recovery greater.
Americans are not so happy about the country’s economic recovery. They should see the other guys.
For the most part, the United States is on its way back. Employment picked up speed in October after declining during the Delta wave, and consumer spending rose to record highs last month.
Still, the average American thinks the economy is bottoming out. Consumer sentiment fell to a low for decades in November, with some even saying the current situation is worse than the depths of the Great Recession. Inflation is probably to blame. Prices rose in October at the fastest pace since 1990. While the country is healing, people do not like the higher prices that have come with it.
Compared to other advanced economies, however, the United States is in a league of its own. Preliminary readings of gross domestic product for the third quarter show the United States is the only G7 nation to have surpassed its pre-pandemic health, the Organization for Economic Co-operation and Development said in a Thursday report.
The US recovery has been so strong that it has played a significant role in lifting the world economy. Healthy growth in the third quarter in the US, Korea, Israel and some European countries, according to the report, led to GDP in the 37-country OECD group exceeding the level in late 2019 by the end of September. Just look at how far ahead the US is in GDP growth.
Yet the US recovery is not the boom it was just months ago. The national economy grew only 0.5% in the third quarter, down from the previous increase of 1.6% in a quarter. It was among the weaker gains for the OECD group and less than half the growth seen in peers, including Italy, France and Germany.
This is what $ 5 trillion looks like in the race for improvement
The discrepancy between the US and other nations’ recovery comes down to money. While most advanced economies adopted some form of stimulus to help their economies earlier in the pandemic, U.S. lawmakers flooded the country with unprecedented federal aid.
More than $ 5 trillion in fiscal support has been approved since the start of the pandemic between President Donald Trump and President Joe Biden, and employment and spending have boomed as Biden oversaw a mass vaccination program.
The assistance was distributed through direct payments, increased unemployment benefits and forgiving loans to small businesses, among others. Together, the stimulus packages helped drive record spending, leaving Americans with trillions of dollars in increased household savings.
Japan’s fiscal response – which is widely estimated to be the third largest – comes in at around $ 3 trillion.
It is quite certain that measuring aid in dollars alone lacks important details. First, many advanced economies had larger social safety nets than the United States before the pandemic, meaning they had less to spend on aid when lockdowns began.
And while the US response is the largest by pure price, it is much closer to other countries when measured as a share of GDP. Singapore’s fiscal response is estimated to come in at 27.1% of its annual GDP, roughly the same as the US stimulus. Slovenia and Guyana follow closely behind.
Regardless of the measure, the United States has a healthy lead in the global recovery. Americans may be annoyed by higher inflation, but the alternative could have been weak stimulus and a much slower recovery.