Thus, the industry's performance during the first half of 1996 was perplexing, with newspaper-advertising growth lagging the general economy. The current economic recovery, while slow, represents the third-longest in postwar history. Some economists question how long we can sustain this recovery. Others find the fundamental health of the economy good, suggesting that growth will continue. I am among the latter group and suspect that slow growth is the cost of avoiding federal intervention.
Some economists argue that the economy can sustain higher growth without the perils of inflation.
Indeed, many were concerned that the Fed would react when unemployment dipped below 5.5 percent last year. Fortunately, the Fed seems willing to test the water and see if current unemployment rates remain feasible. Sluggish growth may be all the economy can tolerate without raising the specter of inflation, shifting the Fed to action and running the risk of spawning a downward cycle. This leaves us with an economy that, in real terms, is only allowed to sustain less than 2.5 percent growth and an unemployment rate of no less than 5.5 percent. This is the cost we bear, if the current recovery is to continue and outlast those of the 1960s and 1980s.