The Sluggish Economy Seems to be Going Nowhere

The recovery from the recession has been nasty, brutish and long. It also is shaping up as one of the most enduring. 

The National Bureau of Economic Research, the semiofficial arbiter of business cycles, judges that the U.S. economy began expanding again in June 2009, just over 58 months ago. That means the current stretch of growth, in terms of duration, is poised to drift past the average for post-World War II recoveries.

A job fair in Washington, D.C. The U.S. jobless rate is higher 

than at this point in other recent recoveries. Reuters

Yet 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 record at this stage 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.

Economists and politicians offer numerous explanations for the slow recovery. Republicans argue that President Barack Obama and congressional Democrats have burdened the economy with tax increases, debt and regulations, such as new financial rules and the Affordable Care Act, that have added uncertainty and dissuaded businesses from investing and hiring. Democrats blame Republicans for withholding support for stimulus spending at precisely the moment the economy needs a boost and for brinkmanship during fiscal battles.

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"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." 

Federal Reserve officials forecast growth at least through 2016, which would make the expansion the fourth longest since the Civil War, according to NBER. The Congressional Budget Office projects growth through at least 2017, or an expansion of 8½ years; only the 1960s and 1990s booms ran so long.

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