The US economy is bouncing back – unlike Europe’s

Every country that imposed a lockdown during the pandemic accepted that there would be an economic price to pay. But governments hoped that, on this measure, their own nation would fare better than others. The objective here was simple: don’t be the ugliest country of the bunch. Now, with some distance between those lockdowns and life today, we’re returning to a more established form of economic competition. Rather than focusing on whose economy looks particularly bad, the emphasis has returned to who is looking good. And on this metric, the United States is putting Europe – and Britain – to shame.

The US government reports that its economy grew by 2.4 per cent on an annualised basis in the second quarter of the year, from April to June. Rising interest rates, which hit a 22-year high this week, have seemingly failed to damper consumer activity, which have seen the United States produce growth results that would be considered decent at any time – not least as the Federal Reserve tries to get a handle on high inflation.

A combination of wages now outpacing the headline inflation rate and excess household savings left over from the pandemic are being attributed to the country’s economic boost.