(Adds background, link to blog)
By Andrea Shalal
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.
The U.S. recovery from the COVID-19 pandemic has seen
employment recovering "much faster" than after recent
recessions, Ben Harris, assistant secretary for economic policy,
and Tara Sinclair, deputy assistant secretary for
macroeconomics, said in an analysis.
Assessing U.S. economic developments two years after
President Joe Biden's COVID relief package, the American Rescue
Plan, Harris and Sinclair said the labor market recovery had
been "exceptionally strong," the 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," they wrote. "Data suggests that the actions taken by
the Biden administration meaningfully contributed to the pace of
recovery and strength of the labor market."
The posting coincided with a release of new Labor
Department data showing 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 and
David Gregorio)
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.