Has the economic recovery arrived?
The U.S. recovery is gaining momentum, but elsewhere, things aren't so rosy
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There is "little doubt that the U.S. recovery is gaining even more momentum," said Brian Chappatta at Bloomberg. Employers added 916,000 Americans to their payrolls last month, crushing the expectations of even the most optimistic analysts and lowering the unemployment rate to 6 percent. Building on February's strong totals, there's no doubt "America is rounding the final corner on the COVID-19 pandemic." A million new jobs per month could quickly become the standard — as it was briefly between last May and August. That "would bring employment back to its pre-pandemic level by early next year." The vaccination rollout effort is in full swing, and President Biden is "keeping his foot on the gas with a $2.25 trillion infrastructure plan." To borrow a phrase from the Reddit crowd, the labor market may be "headed to the moon."
One very good sign is that the services sector is "roaring back," said Anneken Tappe at CNN. In fact, one closely watched index tracking the growth of businesses "from entertainment and recreation to real estate, construction, and retail," hit its highest reading ever. No doubt, the March jobs report is excellent, said Catherine Rampell at The Washington Post. However, working moms "are still struggling to return to work." The pace of employment growth for women with kids is still lagging. Hopefully this will change as schools reopen, but it could take time.
The report released this week proves the $1.9 trillion March stimulus bill was unnecessary, said The Wall Street Journal in an editorial. "Politicians take credit for sunny days," and the Biden administration is no different. Democrats point to the improvement, claim that it came from the stimulus bill, and now want to use it to justify another $4 trillion in government spending. But the job gains "would have happened if Congress did nothing." The government's contribution has been the success of Operation Warp Speed for vaccine development and repealing the lockdowns that restricted the economy. It's no surprise that the strongest gains came in areas "most vulnerable to the pandemic," such as travel, while employment "surged in education as more schools reopened." The Biden administration "wants to sustain an aura of crisis to justify its spend-and-tax plans." In reality, "the economic crisis is over."
It's certainly not for the rest of the world, as "a weakened Europe and struggling developing countries" rely on the U.S. to pull them out of the economic morass, said Jeanna Smialek and Jack Ewing at The New York Times. Boosted by stimulus checks and a revived economy, American spending "should spur trade and investment and invigorate demand for German cars, Australian wine, Mexican auto parts, and French fashions." Those U.S. purchases will be crucial, because economists are forecasting increasingly "divergent growth prospects" between the U.S., China, and other regions, said Chris Giles at the Financial Times. The U.S. and China are "leading the global recovery." But in other places, where the vaccine rollout has been much slower, "growth prospects are weak," and those economies' output "has little chance of reaching pre-pandemic levels until 2022."
This article was first published in the latest issue of The Week magazine. If you want to read more like it, you can try six risk-free issues of the magazine here.