Below Average or New Normal?

August 19, 2016

From the Fed, to the Congressional Budget Office, to most mainstream economists, "average", "trend" , or "normal" growth is assumed to be around 3%.  During this economic recovery we've only seen GDP growth exceed the "normal" rate once......out of 28 quarters.  In addition, GDP growth seemed to peak shortly after QE3 ended at the beginning of 2015.

 

Is this a "new normal" or should we expect growth to again return to 3%?  Check out "Broken Model" for the answer.

 

What should we expect for the economy in the shorter-term and how might the Fed react?  For those answers, check out our latest Economic Update.

 

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