July 12, 2021
The Washington Post gave readers the dire warning that the rapid growth this year, and projected growth for next year, is likely to lead to slower growth in 2023. It then tells readers:
“But there’s a catch. Americans don’t typically look at the level of GDP. They look at the change; they compare things to the previous quarter, not the previous decade, or to a counterfactual scenario in which no stimulus packages were passed. And it’s likely that, because the boom of 2021 and 2022 helped GDP reach its potential more rapidly, the rate of growth in 2023 will be slower than it would have been without stimulus.”
Actually, in their direct daily experience, people have no ability to assess GDP growth. They know if they and their family and friends have jobs. They know if they feel secure in those jobs and are getting decent pay raises. On these issues, the projections provide little basis for concern. The Congressional Budget Office projects that unemployment will average 3.7 percent in 2023, the same as the 2019 average and lower than any other year since 1969.
If the unemployment rate is in fact this low, it is likely that workers will feel relatively secure in their jobs and be in a position to demand reasonable pay increases. If the economy is in fact growing slowly in 2023, as currently projected, people will only be aware of this fact because news outlets and politicians choose to highlight it.