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Title: Inflation in 2023: Causes, Progress, and Solutions
Citation Type: Miscellaneous
Publication Year: 2023
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Abstract: Chair McClain, ranking member Porter, and distinguished members of the subcommittee: Thank you for inviting me to testify at this hearing. My name is Mike Konczal, and I'm the Director of Macroeconomic Analysis at the Roosevelt Institute. I've led our organization's research on the economic recoveries from both the Great Recession and the recent recession following the start of the COVID-19 pandemic. Today, I'm going to speak about the most recent recovery, the causes of inflation that have been unique to this recovery, the progress we've made in bringing down inflation so far, and what Congress and the administration can do to further bring down inflation. The Recovery First, it's important to remember that this recovery has been strong. The economy has added more than 12 million jobs over the past two years-a rate of 517,000 jobs per month since President Biden took office. There are now 4 million more jobs than the February 2021 Congressional Budget Office (CBO) projection, with unemployment 1.5 percent lower and labor force participation 0.2 percent higher than what the CBO estimated would have happened without the American Rescue Plan. Measures of labor market dynamism-which had been depressed for decades before the COVID-19 pandemic-have skyrocketed, allowing workers to move up the career ladder and quit their jobs to seek new, better-paying, and more productive ones. We've seen many headlines illustrating this trend, such as a recent one in The Atlantic: "Low-Wage Jobs Are Becoming Middle-Class Jobs" (Lowrey 2023). In contrast to previous recessions, we are also recovering to the pre-COVID macroeconomic trend, with real GDP close to projections of where it would have been without the pandemic. Inflation In addition to the speed of this recovery, however, we've also experienced inflation that has been higher and more sustained than economists, financial markets, and the Federal Reserve anticipated. Because inflation and any interventions around it have real impacts on people and communities, this is a subject that requires serious analysis and responses.
Url: https://rooseveltinstitute.org/wp-content/uploads/2023/03/RI_MikeKonczal_HouseTestimony_202303.pdf
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Authors: Konczal, Mike
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Topics: Labor Force and Occupational Structure
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