With less than three weeks until the U.S. presidential election, millions of Americans say the economy is a top issue as they decide how to cast their vote — an understandable focus after the rollercoaster of the past four years, which included everything from a bear market to the hottest inflation since the 1980s.
But with the chaos of the pandemic behind us and inflation edging close to its pre-2020 levels, the U.S. economy is ripe for a fresh assessment of its strengths and weaknesses, along with whether the Biden administration’s economic policies have paid off.
By many measures, the U.S. economy has regained its footing, emerging from the health crisis with the type of growth that it experienced prior to 2020. Gross domestic product is growing solidly, while unemployment and the labor market have also rebalanced, remaining close to their pre-pandemic levels. Critically, inflation has dropped to a three-year low and is approaching the Federal Reserve’s annual target of 2%.
To the surprise of many forecasters, that rebound occurred even as the Fed boosted interest rates to a 23-year high in an effort to cool inflation. Historically, such rate hikes have often led to recessions. But so far, the U.S. has avoided a downturn, and instead appears heading for a “soft landing,” or when the economy continues to grow and the job market remains strong despite the headwinds of higher rates.
“In the 35 years I’ve been an economist, I’ve…
