Growth of GDP nearly stalled in the first quarter. It's unsettling news considering how 'old' this recovery is by historic standards.

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Economists had been warning us about a potential slowdown in growth of gross domestic product for the first quarter, but even they were surprised with today’s weak showing — up only 0.2 percent. As Jennifer Lee of BMO Capital Markets told The Wall Street Journal, “You were forewarned. First-quarter economic activity was not pretty. But that was pretty ugly.”

Considering that the average duration of a post-World War II business cycle is about 56 months and this expansion, disappointing as it has been for most Americans, has run about 70 months… Is it time to worry about the “R” word — recession?

Probably. As the chart below shows, this expansion has been marked by many valleys. The drops have been worse than anything seen in the 1990s, or even the 2000s, the latter expansion distinguished by the poorest job creation since the Hoover administration. They have been so deep that in the past they might have signaled recession. Yet the expansion has continued. On the other hand, note that the peaks have been lower than most high points of GDP growth in the previous two decades:

Some important points from the report: The strong dollar is hurting U.S. exports, something of particular importance to Washington state. The payoff from cheaper oil still isn’t showing. Business investment dropped sharply. And don’t forget, these figures could be revised upward. Expansions in the 1980s and 1990s lasted longer than average — but the economy was very different then.

We continue to see a much weaker recovery than any in recent history. It is spikey (to use a Richard Florida term) — corporate profits and cash and incomes of the 1 percent have hit records. But middle-class wealth has eroded, most wages are stagnant or worse, and the jobs regained from the recession tend to pay less than the positions they replaced. Demand remains weak. Government spending on infrastructure and research — essential for future growth — has been stymied by “austerity.”

All this before the Fed has raised interest rates. So the “R” word, probably not. But stagnation can be pretty ugly.


Today’s Econ Haiku:

Recovery sign?

Ben Bernanke got a job

And now he has two