There's more evidence that American workers avoided the dire scenarios many feared during the early months of the pandemic.

• Then, the worry was the unprecedented blow dealt to workers would hang over the economy in the years ahead, as it did in the aftermath of economic crises in the early 2000s.
• But the opposite happened: the labor market bounced back swiftly, setting the stage for the boom-like conditions experienced by most workers today.

Why it matters: Fired workers can feel the impact for years, with economic scars that could lead to lower wages. Yet despite catastrophic early job losses, the 2020 recession — and the historic fiscal support that came with it — broke a phenomenon that's long accompanied downturns.

Driving the news: The millions laid off during the pandemic had vastly better outcomes than workers fired in the aftermath of the prior three recessions since 1990, according to new research from the Cleveland Fed.

• After those downturns, workers on average experienced earnings losses of about 20% within the three years after their displacement — twice as large as that experienced by fired employees during economic expansions.
• But those fired during the pandemic recession, on average, experienced virtually no wage losses at all. In fact, "workers displaced from their jobs in 2020 who were reemployed by January 2022 had no statistically significant change in their earnings by January 2022," Angela Guo, Pawel Krolikowski and Meifeng Yang wrote.

The intrigue: The researchers found that neither generous pandemic-era jobless benefits, nor the composition of fired workers, were likely explanations for why workers fared notably better.

• Instead, it was the collective effect of the "sharp recovery in labor market tightness" that explains why, in aggregate, workers were able to make up lost pay and get better jobs — unlike past recessions.

The bottom line: The trillions of dollars spent in U.S. pandemic fiscal support may have put some upward pressure on decades-high inflation plaguing the economy today.

• But the flip side is that it helped buoy the economy and the labor market, which has worked in favor of job seekers.

The trade deficit surged higher at the end of 2022, as U.S. demand plowed ahead more rapidly than its global trading partners.

Driving the news: America imported $67.4 billion more than it exported in December, the Census Bureau said, wider than the $61 billion trade deficit recorded in November, though well below levels of early 2022.

• The value of U.S. exports edged down (to $250.2 billion, from $252.3 billion), as imports moved up ($317.6 billion, from $313.4 billion).
• For the full year, the trade deficit was $948.1 billion, a 12% rise from 2021.

State of play: Even as pandemic-era stimulus dollars faded into the sunset, the combination of pent-up savings — and a strong job market —meant Americans' demand for imported goods and services remained elevated.

• Meanwhile, many trading partners experienced a bumpier year, hurt by everything from supply disruptions tied to the Ukraine war, to continued lockdowns in China. That curtailed demand for U.S. exports.

Of note: The resurgence in international travel is plainly visible in the data. Americans' spending on travel overseas was $113 billion in 2022, up from $34 billion in 2020.

• International travelers' spending in the United States (which counts as a services export in the arithmetic of trade) was $134 billion, up from $72 billion in 2020.