New York Times: “Seven years into the economic recovery and three months before a presidential election, how is the United States economy doing?”
What’s going right?
“Overall G.D.P. was better than it looks… If we look at ‘final sales,’ G.D.P. excluding inventories, the economy grew at 2.4 percent, a nice rebound from the winter months and in line with forecasts. Final sales tends to be a better measure of the underlying rate of growth, while inventories swing around without reflecting any long-term trend.”
“Consumers are spending money. The largest component of the economy, personal consumption expenditures, grew at a whopping 4.2 percent rate in the second quarter.”
“Wages are rising more quickly… The wages and salary component of compensation is now up 2.5 percent over the last year; that same reading was only 2 percent in the second quarter… Worker pay is not just rising; it’s also starting to rise at a faster pace.”
What’s going wrong?
“Business investment is contracting… Things aren’t looking so great in the business sector. Investment in business structures, equipment and intellectual property fell for the third consecutive quarter.”
“Productivity growth is poor… This has been disappointing for several years for reasons economists don’t entirely understand. But the latest data suggest it will turn out to be even worse than that in the first half of 2016.”