Economists reveal why 'remarkable' US economy has 'diverged so fundamentally from its peers'

12 June 2024

Under President Joe Biden, the United States has enjoyed some of its lowest unemployment rates in more than half a century.

The U.S. Bureau of Labor Statistics (BLS), on June 8, reported that 272,000 jobs had been added in May. Unemployment was at 4.0 percent — a slight increase from 3.7 percent earlier in the year.

But presumptive 2024 GOP presidential frontrunner Donald Trump and his allies have been attacking Biden relentlessly over inflation, and polls are showing a close race. Some national polls released in June are showing Trump with narrow single-digit leads over Biden; other national polls show Biden slightly ahead. And many state polls have been showing Trump with a slight advantage in key swing states such as Pennsylvania, Michigan and Nevada.

The Atlantic's Rogé Karma, in an article published on June 10, stresses that the U.S. continues to have a robust economy but offers some reasons why many voters don't agree.

"The growth rate is high, the unemployment rate is at historic lows, household wealth is surging, and wages are rising faster than costs, especially for the working class," Karma explains. "There are many ways to define a good economy. America is in tremendous shape, according to just about any of them. The American public doesn't feel that way — a dynamic that many people, including me, have recently tried to explain."

Karma adds, "But if, instead of asking how people feel about the economy, we ask how it's objectively performing, we get a very different answer."

Mark Zandi, chief economist for Moody's Analytics, told The Atlantic, "It's hard to think of a time when the U.S. economy has diverged so fundamentally from its peers."

University of Michigan economist Betsey Stevenson argues that the Biden-era economy has been a plus for the U.S. working class.

Stevenson told The Atlantic, "Low-wage workers are finally getting a small taste of the bargaining power that highly paid professionals experience most of the time."

Karma notes, however, that "the out-of-control cost of housing" is "perhaps the biggest black mark on an otherwise excellent economy." And the U.S., according to Karma, "still has lower life expectancy and much higher levels of inequality, poverty, and homelessness than other wealthy nations."

"For millions of people," Karma observes, "getting by in America was a struggle before the pandemic and continues to be a struggle today. Still, that doesn't change the fact that the U.S. economy has had a remarkable four-year run, judged against both its own history or the international competition."

Read Rogé Karma's full article for The Atlantic at this link.

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