Will 2016 Be the True Test of Economic Recovery?

Ben Casselman in FiveThirtyEight asks: “Will 2016 be the year that the economic recovery at last translates into concrete gains for everyday Americans?”

“It’s far from certain that the economy will continue on the same path in the new year. U.S. factories are slowing output and shedding jobs as a weak global economy cuts into demand for American products overseas. Low energy prices are leading to job cuts in the oil and gas sector and are pushing a growing number of oil companies into bankruptcy. That leaves the recovery dependent on consumers, who became more confident at the end of the year but whose actual spending is growing more slowly. (Of course, if wages pick up, that could also lead to more spending.)”

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“Few economists expect a major slowdown in 2016, let alone a recession. And while such forecasts have a checkered history, there’s little reason to think the conventional wisdom is wrong this time around. The question, though, is whether 2016 ends up being yet another year of tepid and unequally distributed growth, or if it can instead mark a true turning point.”

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