And financial markets appear flummoxed, with falling bond yields signaling escalating angst among investors about the outlook while buoyant stock prices suggest an absence of much concern.
For now, though, the drift seems set to continue -- and nowhere is that more evident than in the world’s largest economy, the U.S. The surprisingly large 287,000 jump in payrolls last month quieted fears that the economy was losing altitude after a meager 11,000 gain in May.
Plodding Along
Through all the ebbs and flows, U.S. gross domestic product has grown by an average 2.1 percent per year since the recession ended in 2009. That qualifies it as being the slowest expansion of the post-World War II period. But at seven years old and still going, it’s also already the fourth-longest.
“There are few excesses” that would suggest the expansion is coming to an end anytime soon, said Allen Sinai, chief executive officer of Decision Economics Inc. in New York.
Consumers, the bedrock of the economy, are in very good shape, with household net worth near an all-time high when measured against disposable personal income.
Banks are well capitalized and able to withstand a severe contraction in the economy, according to the Fed’s latest round of stress tests released last month.
For their part, Fed Chair Janet Yellen and her colleagues are caught between a desire to normalize policy as the economy has recovered and concern that such a move would undercut the expansion by strengthening the dollar.
December Hike
After raising interest rates at the end of last year for the first time since 2006, the central bank has repeatedly postponed plans for a second hike and now doesn’t look likely to move until December, according to JPMorgan.