Understanding the Snooze Economy

CALL it the Snooze Economy. Roughly two months before the US presidential election, America's economy has turned both boring and mystifying. It hardly impresses anyone, and yet this plodding performance is probably helping Hillary Clinton by minimising bad economic news. More important: The lacklustre expansion, if continued for a few more years, would represent an enormous achievement. It would finally erase most of the losses of the Great Recession.

Of course, whether it will continue a few more years, or even through the election, are open questions. The truth is that we don't know how strong or weak the economy is. The most reliable economic indicators are not enlightening, because they are telling opposite stories.

On the one hand, gross domestic product (GDP) suggests that the economy could be on the brink of recession. In the first half of 2016, "real" (inflation-adjusted) GDP rose at an annual rate of about one per cent. A recession usually occurs when the GDP declines for two consecutive quarters. By contrast, job figures depict a booming economy. Payroll jobs have increased at an average of almost 200,000 a month in 2016; the reading for July was 255,000.