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Things Are Still Muddling Along-The Risk Remains

The economic recovery is not so strong as many thought and the risks are still high.

By Joel Ross | Updated on January 31, 2015

While the hype was all about how good the recovery has become, the stats do not bear that out. GDP was up only 2.6% last quarter, which is much more realistic than Q# when unusual defense expenditures drove it much higher on a one time basis. In fact for the last 9 years, GDP has grown at less than 3%. That would be consistent with the start of the downturn in housing in 2006. So we cannot say that the US economy is doing really well. While the headline unemployment rate  is way down, the labor participation rate is still at least 300 basis points above trend in good times, wages are not really rising much above inflation, and median middle class family income is still several thousand dollars below where it was when Obama took office. Middle class America has gone nowhere in the past 7 years.

 

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