By Lily Bourne
Initiated by the COVID-19 pandemic, the United States economy fell into a deep recession in 2020, causing the GDP to reach 9% below level, massive unemployment issues to arise, and average earnings to drop. Since then, officials have been implementing relief policies in the years following to attempt to alleviate the damages to our economy. According to The Center on Budget and Policy Priorities, post-pandemic economic growth was much faster than expected. In fact, on October 26, the US Bureau of Economic Analysis reported an unusually high GDP growth rate of 4.9% for Q3. In addition, the US Bureau of Labor Statistics reported that Q3’s productivity measure rose by 4.7%. For those unsure of the significance of these figures, the GDP and productivity are generally considered good measures of our nation’s economic health. The GDP represents the “gross domestic product”, or the value of goods produced in the United States. In the same vein, productivity measures the efficiency of labor in the US and is calculated by dividing the output of labor by the number of hours worked by the labor force.
With both of these rates on the rise, what can we learn about the future of our economy? Well, when increased GDP is coupled with increased productivity, we can understand that the heightened value of goods hasn’t come at the expense of increased working hours. Basically, higher productivity should, in theory, benefit both workers and business owners. Some economists attribute this growth to the increase in wages in recent years, encouraging businesses to increase the efficiency of their existing assets instead of looking for more workers. Although these increases seem to represent a clearly positive shift in the US economy, experts are still unsure of the future. Some economists don’t believe the growing GDP will last, and others argue that continued growth could cause interest rates to rise. Many experts still expect a slowdown in the not-too-distant future, due to a weakening labor market and decreasing consumer confidence. Essentially, Q3’s GDP and productivity rates bear a positive outlook on the US economy for the time being, but experts are still wary of the possible consequences.