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The U.S. Economic Recovery: Long, Slow, but Still Going

Growth is mediocre, but there’s no sign of overheating in any market
Traders on the floor of the New York Stock Exchange on May 21
Traders on the floor of the New York Stock Exchange on May 21Photograph by Spencer Platt/Getty Images

There’s a lot to complain about when it comes to the U.S. recovery. Unemployment isn’t falling fast enough or far enough. Manufacturing is weak. Gross domestic product is expanding at a modest 2 percent clip. Yet this recovery has one advantage: It keeps going. “The current expansion can continue another four to five years,” says Robert Gordon, a professor at Northwestern University and a member of the National Bureau of Economic Research committee that determines when recessions begin and end. That would make this upswing the second longest on record, behind only the 10-year period that spanned the 1990s. The average recovery since the end of World War II is 58 months.

Four years into the upswing, the economy isn’t seeing the excesses that often trigger a contraction. Inflation is slowing, not quickening. Household debt is shrinking, not expanding. The labor market is slack, not tight. Pent-up demand bodes well for the longevity of the recovery. Confronted with high unemployment and a depressed housing market, Americans have put off forming families, buying homes, and acquiring cars. Now, with house prices rising and payrolls expanding more rapidly, their behavior is changing.