brought our economy to a screeching halt. during the second quarter of 2020, the unemployment rate jumped to a high of 14. 8 percent and gross domestic product plunged at a 28 percent annual pace. these dynamics hit some of the most vulnerable populations the most, though strong government responses helped to both ease the effects and make many households much more resilient. once the economy restarted, demand rebounded quickly, while supply was hampered by supply chain difficulties. these supply snags were compounded enormously by a shift in demand away from in - person services and toward goods, which generally have a larger exposure to shipping and supply chain problems. supply shocks to the global economy were subsequently compounded by russia ’ s war against ukraine, which severely disrupted food and energy markets. and labor markets were disrupted by the pandemic as well. employers could not find enough workers, and job - matching was impaired. an important component of post - pandemic healing has been the recovery of supply chains after the pandemic - induced bottlenecks in both goods production and distribution. recent shipping disruptions show supply chain conditions are still an issue, but compared to pandemic - era constraints, we are in a much better position. for example, the price to ship a 40 - foot container from china to the west coast has recently - 3risen to around $ 4, 000, about twice the pre - pandemic level, but it is far below the $ 20, 000 rate in 2021. another key component of the improvement in supply has been in the labor market. we have seen substantial improvements in the labor force through both stronger immigration and higher labor force participation rates, notably by women. as supply has improved, labor demand has cooled, but this cooling has manifested largely in a reduction in job vacancies, rather than layoffs. at the same time, we have seen the labor market working more efficiently — for example, with improved job matching after the large disruptions during the pandemic. the improvements in labor supply and labor market functioning have allowed the unemployment rate to hold steady at a low level. the strong labor market has broadly improved the lives of americans, and particularly so for groups that have long suffered significantly higher unemployment levels and whose jobless rates respond more forcefully to the business cycle. improvements in productivity another key part of the story in the post - pandemic healing of our economy has been the growth of productivity. while measures of productivity tend to be volatile

of the funds raised of late are being deployed for merger and acquisition activity and other corporate spending. considerably less is being used to refinance higher - cost debt or to lengthen debt maturities. the recent signs that cash hoards are being trimmed and leverage is increasing suggest a move towards more normal conditions. these developments may be amplified by increased pressure from shareholder groups in conjunction with a more active market for corporate control. a prominent feature of the current environment is the notable amount of leveraged buyout ( lbo ) activity. an lbo or the threat of an lbo acts to discipline management to raise shareholder value ( jensen, 1986 ; kaplan, 1989 ). lbos, and other forms of private equity investment, may force management to implement strategic changes rapidly to restore the firm ’ s return on equity and boost share prices, in part by increasing financial leverage. lbos increased sharply in late 2005, and they continued apace in the first half of this year. the value of public equity retired by lbos has accounted for almost one - third of the total retired from total mergers and is at its highest level since the boom in the late 1980s. many signs point to a continuation of this high pace of equity retirements. valuations for many firms appear attractive to private equity sponsors. ( although, as i noted earlier, stock prices have risen quite a bit since 2002, their gains have been far outstripped by the boom in earnings. ) lower valuations for firms in industries that are in the throes of downsizing also provide opportunities for lbos. perhaps at least as important, private equity funds are flush with funds, having raised more than $ 100 billion in 2005, a pace that continued in the first quarter of 2006, and general partners of these funds are actively scouting for opportunities to deploy this capital. this robust equity funding, combined with the currently accommodative debt markets, has made many more firms potential targets. moreover, with the rise of so - called club deals, in which private equity funds pool their capital, even very large corporations - replete with large excess - cash positions - are potential targets. the bottom line is greater pressure on business executives to maximize shareholder value. as a complement to traditional private equity funds, hedge funds are also more active as they seek alternative investments to enhance returns. many hedge funds have contributed to the deal activity by providing debt financing, either by directly investing in mezzanine debt or by participating in loan syndications.