Our economy has gone through a whole lot. We have had our ups and downs since the recession. Some believe we are truly make are way through this time, while some believe there will never be a stable time and a height at which we will continue to plateau at. The recovery has been long and dismal at times, but it is truly shaping up to be one of the most enduring. Yet, according to the Wall Street Journal, “after almost five years, the recovery is proving to be one of the most lackluster in modern times. The nation’s 6.7% jobless rate is the highest on the record at this state of recent expansions. Gross domestic product has grown 1.8% a year on average since the recession, half the pace of the previous three expansions.”
Even though Republicans argue that the Obama administration and other Democrats have burdened the economy with tax increases, debt and regulations like the Affordable Care Act, and hiring, Democrats also turn that and blame Republicans for withholding support for stimulus spending especially when the economy needed the boost the most.
“Perhaps the very fact we’ve been growing slower means we haven’t burnt out all the fuel,” said Michael Feroli, chief U.S. economist at J.P. Morgan Chase. “By a lot of metrics, the expansion still has quite a bit of room to run.”
What could possibly be holding us back right now? Does the Fed need to step into play at a more rapid pace? I do not believe this would be the answer. Some believe that the economy is restrained by “secular stagnation” which claims that the labor force and productivity, growing more slowly than in the past, along with reduced consumption and increased savings, prevent the economy from returning to prior growth levels.
“The economy is rebounding from widespread inclement weather and the strengthening in the labor market is beginning to have positive impact on growth,” said Ken Goldstein, an economist at The Conference Board. “Overall, this is an optimistic report.”
Although many economists expect the overall growth rate in the January-March quarter will dip below 2 percent because of the weather disruptions, they are forecasting a rebound in the coming quarters to growth of around 3 percent.
Over the summer months, it will be interesting to see how hiring and consumption will improve, along with interest rates fueling. Our growth look strong in many areas and we should have a positive outlook in the future.