The US is in the midst of an economic boom, but it is more vulnerable to shocks than it was a few quarters ago.
On paper, these are good times for the US economy. The latest GDP numbers show growth was at 3.3% in the second quarter. Business investment is up. The unemployment rate remains low, and the inflation rate is reasonable.
Still, underneath it all lies a nagging question: If the economy is so good, why does it feel so bad?
First, the numbers. Nominal GDP has grown more than 50% since the bottom of the last recession in 2020 — an annualized quarterly growth rate that’s more than 7%. Real median wages are up 5% since 2022, after failing to keep up with inflation in previous years. Unemployment has remained at about 4.5% since 2021 — and for much of that time, there was a worker shortage and a labor market that was very dynamic. Oh yeah, and there’s the stock market: The S&P is up more than 140% from the end of the recession. Finally, American consumers went into this boom in good shape, with balance sheets healthier than they’d been in decades.
Continue reading the entire piece here at Bloomberg Opinion (paywall)
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Allison Schrager is a senior fellow at the Manhattan Institute and a contributing editor of City Journal.
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