Despite some negative consequences, the coronavirus pandemic turned out to be a blessing in disguise for some sectors of the US economy. The country is currently experiencing a productivity boom. The fact is that fewer workers create more products, even in comparison with the pre-pandemic indicators.
Over the past 15 years, nonfarm labor productivity in the United States has remained weak. Its growth was slow and bumpy. Notably, current indicators show that the pandemic has given a strong boost to productivity. It was beneficial for other sectors as well. According to official data, since the beginning of the second quarter of 2020, nonfarm labor productivity increased by 3.8% year-on-year compared with 1.4% in the period from 2005 to 2019. Labor productivity measures economic performance. It compares the number of goods and services produced with the number of hours worked to produce those goods and services. Experts are confident that if this trend continues, the US economy will experience positive changes in the next decade.
In addition, several other important indicators signal the positive impact of the pandemic, e.g. US GDP, which reached the pre-pandemic level in the spring of this year and even slightly exceeded it. Importantly, the US was facing the risk of a recession a year ago. Production volumes in the second quarter were 0.8% higher compared to the pre-pandemic levels. The number of jobs decreased by 4.4% over the same period. An increase in GDP occurred despite a drop in the labor market thanks to productivity growth.
Overall, the US economy is recovering steadily from the consequences of the recent crisis despite record high inflation and low interest rates. Experts are sure that this is an achievement of the Federal Reserve System, which has allocated a huge amount of money to support the economy.
