JPMorgan Sub-New Normal Growth Seen Vexing Next Fed Chief

The next chairman of the Federal Reserve faces an alarming possibility: the new normal for the economy is even worse than advertised.

The long-run potential growth rate for gross domestic product has slid to around 1 3/4 percent per year, from an average rise in GDP of 2 1/2 percent since 1990, according to economists at JPMorgan Chase & Co., the largest U.S. bank by assets. That would be the lowest level since World War II and below the 2 percent mark that Pacific Investment Management Co. pegged as the new normal for the economy.