Payrolls, Prices, Productivity and Profits Hold the Answer to the Puzzling US Economy
A look at the four variables that will tell us whether the country dodges a recession or becomes mired in stagflation.
If you love puzzles, this is the economy for you. The data are so mixed, even the experts are stumped. Gross domestic product has expanded at an average annual pace of just 1% over the past five quarters, less than half the rate seen in the last economic expansion. Recession warnings abound, as do layoff announcements by well-known companies, from Goldman Sachs Group Inc. to Best Buy Co.
Yet the labor market remains robust. Companies took on 339,000 new workers in May, more than triple the increase many economists reckon is consistent with an economy that’s neither too hot nor too cold. It was the 14th straight month the increase in payrolls exceeded expectations.