For the U.S. Economy, a "New Normal"

After a boom-and-bust cycle, a long adjustment alters the outlook through 2020.

First came the go-go years of the mid-2000s. Housing prices soared, the stock market posted big gains, and the economy perked along. Then the housing bubble burst, the jobless rate jumped, stocks tumbled, and a deep recession arrived.

After eight years of a boom-to-bust whiplash from euphoria to despondency, what is normal? Coming up with an answer is hard because the recession was marked by a financial crisis, which takes several years longer for recovery than a garden-variety downturn. Taking note of that, Michael Moran, chief economist for Daiwa Capital Markets America, says, "We’re in the middle of a long-term adjustment process."

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Jerome Idaszak
Contributing Editor, The Kiplinger Letter
Idaszak, now retired, worked on The Kiplinger Letter as its economics writer for 21 years. Before joining Kiplinger in 1992, he worked for 15 years with the Chicago Sun-Times, including five years as a columnist and economic correspondent in the Washington, D.C., bureau, covering five international economic summit meetings. He holds bachelor's and master's degrees in journalism from Northwestern University.