Strong US economic outlook post-Ukraine—measures like supply-side investments, CHIPS, and Science Act created low inflation and job recovery

is unsettling most countries today. Major, persistent are threatening global economies, and the severity of these impacts loom. Given Russia’s war in Ukraine, the ongoing economic implications resulting from the COVID-19 pandemic, climate-related disruptions, and central banks’ decisions to rapidly increase interest rates, another global seems increasingly likely. Yet despite these global challenges, the U.S. economy remains strong with a , a , and . During and following the COVID-19 recession, fiscal supports, such as the American Rescue Plan of 2021, and a historic federal vaccination program helped steward the U.S. economy to an unprecedented recovery, averting a , , and the of longer periods of unemployment. At President Joe Biden’s instigation, Congress has passed an industrial strategy—in the form of the , the , and the —that is helping set the economy on a path of resilience and independence. The evidence suggests that, despite headwinds, the United States is set up to have a stronger economic outlook than many other leading industrial nations—some of which have already seen their economies . This article highlights seven indicators—inflation, energy prices, gross domestic product (GDP), unemployment rate, long-term unemployment, the 2023 GDP forecast, and the 2023 unemployment rate forecast—that compare the state of the economic recovery in the United States and its outlook for 2023 with that of its Group of Seven (G-7) counterparts. What is the G-7? Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States constitute the —an informal gathering of some of the largest advanced economies in the world. The European Union is a . Together, the G-7 for nearly half of global economic activity. Inflation is a global issue In nearly every advanced economy, is currently higher than historic averages, putting pressure on individuals, businesses, and the stability of economies. Simply put, the United States is far from the only country dealing with rising prices. Inflation is a problem in every single country in the G-7, but it is having the strongest impact in Germany, Italy, and the United Kingdom, where inflation is at or near double digits. (see Figure 1) Inflation is even higher than usual in Japan, which had experienced more than two decades of deflation. [Figure omitted] While inflation arose as an issue earlier in the United States than in other G-7 nations, current inflation in every member country is primarily related to . Globally, Russian President Vladimir Putin’s war in Ukraine is putting upward pressure on energy and food costs; ongoing supply chain issues are creating bottlenecks for specific goods; and the aftereffects of the pandemic continue to cause rising prices. Energy costs are particularly rising in the United Kingdom, Italy, and Germany—unsurprising given these countries’ overdependence on Russian fuel supplies. (see Figure 2) [Figure omitted] How the Biden administration’s industrial strategy is meeting this moment The current global inflationary crisis serves as a reminder of the pitfalls of overreliance on global supply chains and underscores the urgency of expanding domestic supply, particularly of critical goods. To respond to this need, the Biden administration’s industrial strategy will reduce consumer costs and create good new jobs through supply-side investments, ultimately building a more resilient economy. For example, the Inflation Reduction Act includes historic investments in that will expand domestic production and help relieve supply chain bottlenecks—setting the United States on a course toward a . To advance this goal, have announced new domestic manufacturing efforts since the law’s passage in August, which will also create jobs at home in the future. The similarly incentivizes domestic manufacturing and research and development. Specifically, by revitalizing domestic semiconductor manufacturing capacity, the CHIPS and Science Act will move the United States toward supply resilience when it comes to a critical input. In combination, these efforts will help the United States better absorb economic shocks moving forward. The U.S. economy has recovered faster than its global counterparts Although most leading economies are experiencing inflation, the U.S. economy remains strong. While the COVID-19 pandemic created unprecedented economic in leading economies, the U.S. economy much faster than any other in the G-7; , the country regained all real GDP—a measure of economic activity—lost since the start of the pandemic recession. (Figure 3) [Figure omitted] In contrast, some economies, such as the United Kingdom, are operating below pre-recession levels, making the prospects of another downturn—one that has already been by the Bank of England—extremely concerning. The robust recovery in the United States was not a foregone conclusion, but instead the result of intentional policy choices. Strong , including the expansion of unemployment insurance and enhancements to the child tax credit, helped the United States avoid a prolonged economic downturn. The labor market recovery in the US has also been strong The of the U.S. labor market from the depths of the COVID-19 pandemic has been historic. In a little more than two years, the economy had lost during the recession, and the unemployment rate remains near 50-year lows—and lower than in many G-7 countries, including neighboring Canada. (see Figure 4) In places such as the United Kingdom, the of different labor market policies meant that during the COVID-19 recession, the unemployment rate did not spike as it did in the United States. This makes the recovery of the unemployment rate in the United States even more remarkable—demonstrating the of pandemic relief measures and an expanded social safety net. [Figure omitted] Long-term unemployment is lower in the US than in most other G-7 nations Although labor force participation has not yet completely recovered in the United States, long-term unemployment, while unacceptably high, is much lower than in almost all other G-7 countries. (see Figure 5) This is critical, as sustained long-term unemployment can disconnect workers from the labor force, making it difficult for them to return. Ensuring that workers are able to maintain their connection to the labor force and avoid a loss of skills is essential to a . In the United States, was critical to preventing scarring, especially by ensuring that young workers, low-wage workers, and workers of color—who particularly struggled during and following the Great Recession—experienced strong wage growth.