◼ ECONOMICS Bloomberg Businessweek June 10, 2019
34
THEBOTTOMLINE The10-yearrunofU.S.growth,possibly
nearingitsend,willberememberedasa longbuttepidexpansion.
Itsslownessprobablyprolongeditslife.
wayfromfullemployment,” saysDartmouth
CollegeeconomistDavidBlanchflower,authorof
NotWorking:WhereHaveAlltheGoodJobsGone?
Theinvisiblereserveoflaborkeepsa lidon
wagesforthosewhoareworking.Summersargues
thatevenwithtoday’slowunemploymentrate,
someworkersremainafraidthey’lllosetheirjob
if theyaskfora raise.“Thesecularstagnationpsy-
chologyhastakenholdoftheeconomymorethan
it’stakenholdofeconomists,”hesays.
Thetaskofdatingthebeginningandendofan
economicexpansionfallstoacademiceconomists
whositontheBusinessCycleDatingCommittee
oftheNationalBureauofEconomicResearch.
Unlikeothercountries,theU.S.hasnosimple
ruleofthumb,suchastwoconsecutivequarterly
declinesinGDPmarka recession.Thecommittee
takesa widerangeofeconomicdataintoaccount,
includingjobsandincomes.It judgesanexpansion
tobegininthemonthwhenthingsremainbadbut
havestoppedgettingworse.Likewiseatthetop,
evenif thingsareverygoodbutnotquiteasgood
asthemonthbefore,a recessionmayhavesetin.
Thecommitteegenerallywaitsa yearorsotopin-
pointthetoporbottomofa businesscycle.
Expansionstypicallyendwhenthe central
bankraisesinterestratesexcessivelyinaneffortto
staveoffinflationcausedbystrongdemand.Less
often,they’recutshortbya financialcrisis,asin
2007-09,whenirrationalexuberanceledtotoo
muchborrowingandthena waveofdefaultsand
liquidations.Becauseofthetortoiselikepaceof
thisexpansion,pricepressureshavebeenmuted.
Also,there’slittleevidenceofthekindsofbubbles
thatendedthelasttwoexpansions.
Still,ourpretty-goodtimescan’tlastforever.
MerrillLynch’sMeyersays,“Idothinkwe’reinthe
latestagesofthecycle.”Thatseemstobethecon-
sensusaswellamongbondinvestors,who’vedriven
theyieldon10-yearTreasuriesdowntojust2.1%,the
lowestintwoyears.(Stockinvestors,ontheother
hand,arerelativelyoptimistic—seethenextstory.)
In 1931 thegreatBritisheconomistJohnMaynard
Keyneswroteabouttheriskofa prolongedperiod
ofsubpargrowth:“thelong,draggingconditions
ofsemi-slump,oratleastsub-normalprosperity”
followinga recession.Optimistically,Keynessaid
policymakers had the means to treat such a con-
dition, but only if they choose to exercise their
power. Blanchflower, who cites Keynes in Not
Working, writes: “That quote sends shivers down
my spine every time I read it.” �Peter Coy
Taking Stock
How the U.S. has changed since the start
of the current expansion, in June 2009*
Jobs
Economy
Markets
Families
Housing
Average income, bottom quintile
Manufacturing employment
Labor’s share of national income
Core annual inflation rate
Share of men age 25-54 participating in labor force
Median usual weekly earnings of men
Homeownership rate
Average income, top quintile
Real median household income
Payroll employment
Leverage of risky corporations††
Black homeownership rate
Employment-to-population ratio
Median usual weekly earnings of women
Federal minimum wage
Share of the workforce in a union
Employment, age 65 and up
Current-account deficit as a share of GDP
Net worth of households and nonprofits
Budget deficit as a share of GDP
U.S. GDP in current dollars
Job openings
Federal debt owed to the public as a share of GDP
Share who say it’s a good time to find a quality job
Federal funds rate, top of range
Median duration of unemployment, in weeks
Yield on 10-year Treasury notes
Unemployment rate
Median price of an existing home
S&P 500
Nasdaq Composite Index
Share of mortgages that are delinquent
Then
$11.6k
11.7m
68.9%
1.7%
90.0%
$818
67.4%
$171k
$60k
131m
38.8%
46.5%
59.3
$652
$6.55
12.3%
27.1m
3.6%
$57.8t
9.8%
$14.5t
2.5m
52%
11%
0.25%
17.2
3.8%
9.5%
$182k
924
1,816
9.2%
Now
$13.3k
12.8m
66.4%
2.1%
89.2%
$994
64.3%
$222k
$64k
151m
40.4%
41.1%
60.6
$800
$7.25
10.5%
36.8m
2.3%
$104.3t
3.8%
$21.3t
7.5m
78%
65%
2.50%
9.4
2.1%
3.6%
$267k
2,803†
7,527†
4.4%
*FIGURES FROM JUNE 2009 AND JUNE 2019, OR CLOSEST AVAILABLE DATE; OF RISKY PUBLIC NONFINANCIAL CORPORATIONS, THOSE THAT HAVE SPECULATIVE-GRADE OR UNRATED DEBT. †JUNE 4 CLOSE; ††GROSS BALANCE SHEET LEVERAGE (^)
DATA: DEPARTMENT OF LABOR, COMMERCE DEPARTMENT, INTERNATIONAL MONETARY FUND, FEDERAL RESERVE, GALLUP, BLOOMBERG