Neil Irwin in the NYT's The Upshot:
I have no idea how the United States economy is doing. And the closer I look at the data, the more contradictory it looks.
A strong case could be made that it is in its most vulnerable spot in years, at risk of a new recession amid a global slowdown. The market for many types of risky bonds is in disarray, and “the dangers facing the global economy are more severe than at any time since the Lehman Brothers bankruptcy in 2008,” the former Treasury secretary Lawrence H. Summers wrote recently.
There is also a strong case that the United States economy is robust enough to withstand whatever challenges might arise from overseas, and that the evidence of a slowdown is scattered and overstated. Fewer people have filed for unemployment insurance in recent weekly readings, for example, than any time since 1973.
I’ve tried several times in the last few weeks to convince myself that one of those stories is correct, but just can’t decide between them. And because The New York Times is not fond of headlines that include the “shruggie” emoticon (for the uninitiated, that would be ¯_(ツ)_/¯), I have held off writing anything.
Why am I telling you all this? Because sometimes the most accurate portrayal of a situation revolves around uncertainty — and because we journalists aren’t always honest about that. This is my effort to be a little more honest.
Rather than picking an analytical case and pretending to be more certain than I am, I want to walk readers through the conflicting evidence. Below, I do so in the form of the debate that has been playing out within my own head — and, very likely, around conference tables at every economic research group and central bank you can think of.
It sure feels as if we’re on the verge of something bad. The expansion is six years old, making it already the fourth-longest since World War II. If the economy does soften, the Federal Reserve is out of ammunition to do much of anything about it. This feels a little like late 2000, when there were signs the economy was losing momentum even though growth was still technically positive. Then in 2001 there was a mild recession.
Whoa, not so fast. Back then there was a huge correction in the stock market and downturn in business investment that caused the recession. What are the sectors that you see correcting in 2015 or 2016 that put the economy at that much risk?