WASHINGTON, March 10 (Reuters) - Shifts in U.S.
employment over the past two years toward sectors with higher
wages and productivity, and higher average hours worked, may
drive further gains in labor productivity going forward, two top
Treasury Department economists said on Friday.
In an analysis published Friday, Ben Harris, assistant
secretary for economic policy and Tara Sinclair, deputy
assistant secretary for macroeconomics, said the U.S. recovery
from the COVID-19 pandemic has seen employment recovering "much
faster" than after recent recessions.
They said the U.S. labor market recovery had been
"exceptionally strong," the U.S. economy was now over 5% bigger
than before the pandemic began and core inflation was lower than
in many major advanced economies.
"Acknowledging that other advanced economies faced different
economic shocks — notably, our European partners were more
adversely affected by Russia’s war against Ukraine—the evidence
shows that the U.S. economic recovery has been quite strong,"
Harris and Sinclair wrote in a posting on the Treasury website.
The posting came hours after the Labor Department reported a
slight increase in the U.S. unemployment rate to 3.6% in
February and higher-than-expected payroll gains, with hiring
concentrated in a narrower range of industries.
Harris and Sinclair did not address the fresh data, but
noted significant differences in employment statistics among
Group of Seven economies in the early phase of the pandemic,
largely due to differences in how those economies supported
workers and businesses during the shutdowns.
In the United States and Canada, unemployment insurance was
most suited to rapid, large-scale support. Meanwhile many
European economies leveraged social safety nets, often in a way
that led to continued employment in official statistics.
Despite differences in the initial response, employment
rates were now low across the G7 nations, they said.
But labor productivity growth in the United States had
outpaced that of Europe and Japan, possibly because the U.S.
unemployment insurance system allowed greater movement of labor
relative to systems that preserved employer attachment.
"In general, U.S. employment has reallocated from lower wage
industries to high-wage and higher productivity industries. U.S.
employment has also shifted to industries with higher average
hours worked, implying a stronger recovery in hours relative to
employment. This reallocation of labor may drive further gains
in labor productivity going forward," they said.
(Reporting by Andrea Shalal; Editing by Chizu Nomiyama)
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