the mad rush of the American economy in 2021, Auto News, ET Auto

The economy created an average of 555,000 jobs per month this year, but the pace of hiring has been uneven.

Washington, December 10, 2021 – Millions of Americans have regained the jobs lost during the pandemic, but soaring prices this year have complicated the United States’ economic recovery.

The severity of inflation was confirmed on Friday when the Labor Department announced a 6.8% jump in its November Consumer Price Index (CPI), the largest annual increase in nearly 40 years.

Here is the latest information on the state of the world’s largest economy as it rebounds from the Covid-19 slowdown:

Millions back to work
In November, unemployment fell to 4.2%, a sharp recovery from April 2020, when the unemployment rate soared to 14.7% after more than 20 million workers lost their jobs when the pandemic hit. forced businesses to close.

The economy created an average of 555,000 jobs per month this year, but the pace of hiring has been uneven.

As the economy remains about four million jobs below pre-pandemic levels, there were 11 million openings last month and millions of Americans quit to find better jobs or change. careers.

Many companies are complaining that they can’t find enough workers to fill the vacancies, and some have started offering improved benefits, signing bonuses and salary increases to attract talent.

The prices are soaring
The wage hike is part of the inflation push that has hampered the recovery this year and created challenges for President Joe Biden’s political agenda.

There are many causes. Supply chains around the world have been hampered by the fallout from pandemic closures and shipping delays, which have created a semiconductor shortage that has hit auto assembly lines, pushing up vehicle prices. opportunity.

They have also been overwhelmed by demand, which is particularly evident in the United States, where consumers have seen their wallets drained thanks to government stimulus measures adopted to encourage the recovery.

The Federal Reserve’s efforts to prevent a serious slowdown, including cutting interest rates to zero, also played a role.

The Fed has recognized the inflationary threat and is expected to reduce its pandemic stimulus more quickly and raise rates as early as the first half of next year.

Economists believe inflation will come down through 2022, although it could get worse before it gets better.

High increase
The US economy experienced its most severe slowdown in decades last year, but has regained lost ground, albeit at a fluctuating pace.

The economy grew at a high annual rate of 6.7% in the second quarter, but at a much lower rate of 2.1% in the third quarter, dragged down by the Delta variant of Covid-19, which has complicated business and scared consumers.

But with infections falling from this wave, economists are predicting better growth in the last three months of this year.

Biden’s complicated agenda
Biden took office in January and shortly after securing passage of the $ 1.9 trillion US bailout, Washington’s third pandemic stimulus package.

The White House has pointed to falling unemployment and rapid growth as proof that the spending has paid off.

Critics point to him as one of the culprits of the spike in inflation, saying it has inundated consumers and businesses with the money they previously spent on goods that are currently scarce.

Biden’s Democrats control Congress by a very narrow margin, and in November they managed to push through a $ 1.2 trillion infrastructure overhaul with some Republican backing, which was a priority for the president. .

More elusive is Biden’s 10-year, $ 1.8 trillion package to improve social services and tackle climate change, which Democrats call a landmark investment in priorities that have been neglected for years.

But Republicans, and even some Democrats, argue that with inflation so high, now is not the time to pass such a massive bill.

The House has approved the proposal and Democratic Senate leaders want it passed before Christmas, but its prospects there remain uncertain.

Also read:

With the recent wave of price hikes expected to remain a concern for some time, the US Federal Reserve is likely to raise interest rates sooner, the IMF said on Friday.

As a policy, Credit Suisse does not provide absolute growth figures in its forecasts. However, an extrapolation of the available data and projections indicate that economic growth could fall by 9% during the period 2022-2023, which, according to the brokerage, reaches up to 400 basis points (bps) in the period. above consensus figures.


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