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The Crushingly Boring Recovery

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Wait 'till next year.

Many economists now predict 2014 will be the best year for growth since 2005, while joblessness is expected to click below 7% next year for the first time since 2008. Houses are selling again, the energy sector is booming and jobs, while not plentiful, are being created at a steady pace. On Wednesday, the Federal Reserve upped its estimate for next year's expansion as well….

It has been a long haul. The recovery that began in June 2009 has been painfully slow. Jobs, median household income, industrial production and home prices still haven't returned to the levels they were at before the recession.

But despite the weak pace of overall growth, the recovery has proved surprisingly resilient. The economy has absorbed a series of shocks, from tax hikes to a tsunami in Japan, without getting knocked off course or falling back into recession. And crucially, inflation remains low….

Such doubts are inevitable amid a recovery that has defied the contours and pace of previous comebacks. The labor market remains strained, even as the unemployment rate has dropped to 7.6%, from double-digit levels. The U.S. has 2.4 million fewer jobs today than when the recession began. Adjusting for population growth, it will take more than nine years at the current rate of hiring to return to prerecession employment levels, according to estimates from the Brookings Institution.

Slow hiring and scant wage growth have made the recovery feel no different from the recession for some. According to the latest WSJ/NBC News poll, 58% of Americans believe the country is in a recession….

And yet, consumer confidence now stands at a five-year high. Households that borrowed extensively before the recession have pared their debt. After years of cutting back, they are spending again, moving beyond absolute essentials to big-ticket purchases that were postponed in leaner times.

Slow-Motion U.S. Recovery Searches for Second Gear [WSJ]



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