Economic Growth

Black unemployment averaged 6. 1 percent in 2019 and reached an historic low of 5. 4 percent in August 2019. It jumped to 16. 7 percent in April 2020 and was still a very high 10. 3 percent in November. The white unemployment rate averaged 3. 3 percent in 2019 and rose to 14. 2 percent in April.

It supplants its predecessor, “The Legacy of the Great Recession, ” which covers the decade from the start of the recession in December 2007 through December 2017 with a focus on the plunge into and recovery from the Great Recession. As noted above, earlier this year, policymakers responded to the pandemic with a series of policies to support businesses, individuals, and public health efforts. These include the Coronavirus Preparedness and Response Supplemental Appropriations Act, the Families First Coronavirus Response Act, the Coronavirus Aid, Relief, and Economic Security Act, and the Paycheck Protection Program and Health Care Enhancement Act. In the face of these concerns, some Republicans have argued that high current and projected federal deficits should curtail any new economic stimulus. But the severity and breadth of the economic decline and the remarkably low interest rates that exist today mean that concerns about the long-term federal budget should not stand in the way of policies that could help people and the economy now.

It was in the 3. 5 percent to 3. 7 percent range from April 2019 through February 2020, reaching rates even lower than in the long 1990s expansion. Through February 2020, total payroll employment had risen every month for 113 straight months. Private employment had risen for 120 straight months, but total government employment was barely above what it was at the start of the expansion. Large employment losses in March were only the tip of the iceberg of coming job losses. This chart book documents the economic expansion and will continue to track the evolution of the economy.

The household survey used to estimate employment statistics is designed to distinguish between people who are unemployed and those who are not in the labor force. Marginally attached workers, who are included in the U-6 measure of unemployment and underemployment, are not in the labor force because even though they say they want a job, they have not looked recently enough to be counted as unemployed. The short-term demand stimulus from the late-2017 tax cuts and early 2018 spending increases injected additional aggregate demand that complicated the Fed’s task in 2018. The rise in unemployment since February 2020, however, pushed the unemployment rate well above the 10. 8 percent rate reached in late 1982, which itself was the highest since the 1930s. It was a still-high 6. 9 percent in October, but the Bureau of Labor Statistics says the actual rate likely is slightly higher due to misclassification of some workers. Nevertheless, by late 2015 the unemployment rate had fallen to 5 percent, its rate at the start of the recession, and it began to fall further at the beginning of 2017. The unemployment rate was 4 percent or lower for the last 24 months of the expansion.

Publications range from in-depth reports and thought leadership examining critical issues to executive briefs aimed at keeping Deloitte’s top management and partners abreast of topical issues. Having lost the United Kingdom and faced tensions with the outgoing US government, the EU remains determined to extend the realm of trade liberalization. In recent years, it has signed trade deals with Canada and Japan and initiated negotiations elsewhere. By the end of 2020, such efforts bore fruit with a new investment agreement with China. The main goal for the EU was to support the ability of European companies to operate profitably in China. The EU claims that the new agreement creates a level playing field for European companies and ends forced technology transfers.

They can also produce public benefits that GDP does not necessarily capture, such as distributional fairness and health and safety improvements. Poorly conceived policies, however , can impede growth and hurt national economic welfare. In January 2020, before the pandemic, CBO projected that actual GDP would exceed potential GDP this year but slow thereafter. Its revised July projections show a very sharp drop in GDP in the first half of 2020 and a partial recovery in the second half, followed by a slower recovery.

Workers enjoy a rising material standard of living when their earnings rise faster than the cost of the goods and services they buy. The deterioration in potential GDP growth in the Great Recession, however, is a cautionary tale about the risks to longer-term growth when the economy undergoes a deep recession and slow recovery.

Short-term changes in monetary and fiscal policies aim to minimize bouts of excessive inflation or unemployment due to fluctuations in aggregate demand around potential GDP. “Supply-side” policies, such as well-conceived tax, regulatory, and public investment measures, can complement labor force growth and private investment in expanding potential GDP.


The most effective, fair, responsible, and rational approach would be to provide economic stimulus and relief now and address the long-term fiscal problem later. The Deloitte Global Economist Network is a diverse group of economists that produce relevant, interesting and thought-provoking content for external and internal audiences. The Network’s industry and economics expertise allows us to bring sophisticated analysis to complex industry-based questions.

Under the revised projections, GDP in the fourth quarter of 2021 still will be 3. 4 percent below its potential level. These favorable trends ended with the sharp contraction in economic activity starting in March 2020. While there has been improvement in the past few months, in October, there still were 11. 1 million unemployed workers and only 6. 7 million job openings and the quits rate was still below where it was in February. In the earlier episode, however, a year after peaking at 2 . 6 percent, the long-term unemployment rate had dropped to 1. 4 percent. It took six years to fall back to that rate in the recent expansion, which it did in June 2015.