The U.S. economy versus the Euro-area economy – 2020 to 2022
Was the Biden/Harris economic strategy successful?
Issue: Republicans claim the Biden/Harris administration worsened the U.S. economy, especially by increasing the rate of inflation. This memo examines how both inflation and unemployment in the United States compared to inflation and unemployment in the Euro area.
Analysis: The chart below has information on inflation and unemployment in both the Euro area and in the United States for three year, 2020, 2022, and 2022. The chart also contains the aggregate change in the price level and the average unemployment rate in both areas.
Observations:
· The growth in inflation was a worldwide phenomenon impacting both the United States and the Euro area.
· The aggregate growth in prices over the three years was 11.4 percent for the Euro Area compared to 14.5 percent for the United State. The differential was around a point higher per year in the United States than the Euro area. However, by 2022 the inflation rate was lower in the United States than in the Euro area.
· The unemployment rate in both the Euro area and the United States was around 8.0 percent in 2020 at the start of the pandemic. In 2022 the unemployment rate was 3.6 percent in the United States compared to 6.8 percent in Europe.
· The average unemployment rates for the three years were 7.5 in the Euro Area compared to 5.7 in the United States.
Concluding Thought: The data reported here indicates that during the Biden years the United States economy basically outperformed the Euro-Area economy. No one likes inflation but the slightly higher inflation rate in the United States corresponded with substantially higher growth and lower unemployment. In this sense, the Biden/Harris economic strategy was successful.
Links to the data:
https://www.macrotrends.net/global-metrics/countries/EMU/euro-area/inflation-rate-cpi
https://www.statista.com/statistics/267906/unemployment-rate-in-eu-and-euro-area/
https://fred.stlouisfed.org/series/UNRATE#0
Will offer additional charts on the world economy soon.