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Putting America’s Recovery to Work

BERKELEY – America’s economy grew much more rapidly than expected in 2013 and appears poised to strengthen further this year. But there is still considerable slack in the labor market, and, as long as it persists, the gains from faster growth will continue to be concentrated at the top of the income distribution, as they have been throughout the recovery.

According to recent BEA estimates, real (inflation-adjusted) GDP grew at a 2.7% average annual rate in 2013, compared to only 2% in 2012. Most forecasters – including the nonpartisan Congressional Budget Office, the so-called Blue Chip consensus, and the Federal Reserve – predict that annual real growth will reach at least 2.8% in 2014.