Mar 16, 2024 - Economy

The post-COVID phoenix economy

Data: Bureau of Economic Analysis via FRED; Note: Seasonally adjusted annual rate; Chart: Axios Visuals
Data: Bureau of Economic Analysis via FRED; Note: Seasonally adjusted annual rate; Chart: Axios Visuals

Over the past 14 quarters, since the global economy screeched to a halt in the face of the COVID pandemic, U.S. gross domestic product — the value of all the goods and services produced within this country — has surged by an astonishing 40%.

Why it matters: This is an unprecedented — and largely unheralded — economic miracle, one that nobody expected during the depths of the COVID recession.

The big picture: Global supply chains shattered and international commerce suffered its greatest blow in a century — one from which it still hasn't fully recovered. But far from ushering in a "Greater Depression," the pandemic destroyed a lot of suboptimal jobs and replaced them with something much more productive.

  • If anything, the U.S. economy emerged from the pandemic too strong — forcing the Fed to hike rates aggressively to control surging inflation.

What they're saying: "The enormous labor market churn of COVID in 2020-21 had the unintended benefit of moving millions of lower-income workers to better jobs, more income security, and/or running their own businesses," Adam Posen, president of the Peterson Institute for International Economics, tells Axios.

The bottom line: In burning down much of the old economy, we created the preconditions for a phoenix to rise from its ashes.

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