The U.S. ascent ends — at least for now — China’s long reign as the principal engine powering the $90 trillion global economy. Free spending by the Biden administration — coupled with the Federal Reserve’s ultralow interest rates — is driving the nascent U.S. boom and lifting other countries, where governments have not responded as aggressively to the pandemic. As Americans spent their $600 government stimulus checks in January on furniture, laptops and clothing, the U.S. imported a record $221 billion worth of goods. And that was before a round of $1,400 checks in March.
Fresh evidence of the U.S. outperformance appeared on Friday as the Labor Department reported that the economy had gained 916,000 new jobs in March and that the unemployment rate fell to a post-recession low of 6 percent. The Institute for Supply Management’s gauge of manufacturing activity released on Thursday hit its highest mark since December 1983.
Accelerating progress in vaccinating people against the coronavirus, plus more generous government spending, explains the U.S. edge. As of the end of March, the United States had vaccinated more than twice as large a share of its population as had the European Union.