The United States economy is full of innovation. It has to be. Manufacturing industries that dominated the economy decades ago - textiles, televisions, even automobiles, to a large degree - have moved overseas, where costs are lower. Yet the U.S. economy, prior to the pandemic, had expanded to record levels. And now, the U.S. Healthcare industry is mobilizing to improve COVID-19 testing, treatments and vaccines. Consider that U.S. GDP was approximately $1 trillion in 1930 but nearly $22 trillion at the end of 2019. That's growth of 22-times. Meanwhile, the U.S. population has grown less than 3-times during that time span, to 320 million from 120 million. The delta between GDP growth and population growth has been driven in large part by innovation. In addition, the value of listed corporations on U.S. stock exchanges at the end of 2020 was approximately $32 trillion, representing 41% of global equity market capitalization, while U.S. GDP represented only 25% of global GDP. The current low level of interest rates (the benchmark 10-year Treasury bond yield is 1.1%) and the relatively high level of the dollar both attest to the confidence that global investors have in the innovative U.S. economy.

The U.S. economy added 379,000 jobs in January, ahead of expectations. The unemployment rate dropped to 6.2%. Most of the job gains occurred in leisure and hospitality, with smaller gains in temporary help services, healthcare and social assistance, retail trade, and manufacturing. Employment declined in state and local government, education, construction, and mining. The labor market continues to reflect the impact of the pandemic, as the shape and character of the workforce is changing. In February, 22.7% of employed persons teleworked because of the pandemic, up from 21.8% in November; this trend is likely to remain intact through 2021. The current number of jobs is 8.7 million lower than the February 2020 level. The civilian labor force is down 4.5 million from last February, as these workers have given up on finding jobs. On Thursday, the Labor Department reported that another 745,000 people filed initial unemployment claims, and the total of continuous claims was 4.4 million, down from 4.9 million a month ago. The data indicates that the employment environment, while improving, is still under stress -- a point Fed Chairman Powell made in a press appearance Thursday. We expect the unemployment rate will remain high, and the Federal Reserve will keep interest rates low, into 2022.