B. Will the Economy Falter? Essay

The U. S. is now in its fifth straight course of economic growth. (There was a brief recession back in 2001. ) It has been discovered over the last 60 years economic that recoveries on intermediate last only louver years. Once the five-year mark is reached, an economy typically runs into trouble. Cracks and strains start to appear. Inflation pressures build, interest rates move higher, housing weakens and military control inventories begin to swell. On the media pundits utter the R word (recession) more ofttimes at this juncture. So the obvious question is If the present recovery is five years old, is this economy now in jeopardy?The answer, fortunately, is no. around sectors, like housing, are showing signs of tiring. Even the pace of job initiation has been slowing the last four months. However, when diagnosing the health of an economy, it is vital to recount between an economy that is merely slowing to a more mark off and sustainable pace from one where fundamentals have so deteriorated that a recession is all but inevitable. All evidence this time points to the former, that is to say that the economy remains in sound health with the business oscillation cold from over. The economy has indeed performed very well so far in 2006.Growth surged an estimated 4. 5% annual pace in the outset half despite high energy prices and rising interest rates. Inflation, though slightly higher than what the Federal Reserve prefers, is still quite benign. Companies uphold to focus on operating more efficiently and raising productiveness levels. Job creation, which has been disappointing recently, is still running at an average of most 150,000 a month, very near the level of 165,000 per month seen in 2005. S&P 500 earnings are expected to increase by 11% in the second quarter, after a 15% surpass in the first three months (Baumohl).