Though the United States faces serious economic challenges amid the ongoing global pandemic, 2021 was an extraordinary year of economic growth and recovery. The country saw record job gains and an unprecedented drop in unemployment. The economy likely grew faster than in any year since 1984, as measured by real gross domestic product (GDP). In 2021, the economy not only regained all pandemic-related GDP losses—it also surpassed pre-pandemic levels. Despite elevated inflation, Americans’ disposable incomes were higher in 2021 in real (inflation-adjusted) terms than they were in 2019 and 2020. Additionally, by many important measures such as savings and bank balances, Americans are more financially secure. The United States also made dramatic progress in lowering its exceptionally high rate of child poverty.
None of this was inevitable. Rather, it was the result of bold policies that bolstered the recovery and provided direct aid to households, most importantly the American Rescue Plan Act (ARPA) and the COVID-19 vaccine program. Much of this aid was disbursed to families hit hardest by the devastating economic impact of the pandemic: the unemployed, the poor, and families struggling with the high costs of raising children. Bold federal action helped families make ends meet through additional stimulus checks; expanded unemployment insurance benefits; expanded monthly child tax credit payments; and other policies. These policies addressed weaknesses in the social safety net that became more acute during the pandemic but existed well beforehand. And many of these interventions were temporary. Much work remains to not only ensure a strong recovery but also to extend progress beyond the pre-pandemic status quo toward an economy that works for all.
While the challenges are urgent and real, the fact is that, by so many key measures, the economy today is booming. This Biden Boom has been particularly strong for workers—who have access to better-paying jobs—and are seeing their wages growing after decades of seeing economic benefits accrue to the wealthy and corporations.
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