This is the opening to the Review and Outlook section of the 2014 Manheim Used Car Market Report released yesterday at NADA :
June of 2014 will mark the economic expansion’s fifth year. It is an anniversary that will be achieved. For some individuals and industries it will mark a half decade of exceptional advancement. But, for others, progress has been painfully slow or non-existent. And, for the macro economy, despite five years of slow and sustainable growth, there is a sense we’re just one lug nut away from the wheel falling off.
Explanations for the differing economic performance between groups of individuals and businesses, the lingering sense of unease, and the spate of unusual economic trends are often placed under the rubric – “the new normal”. Demographic forces do suggest that slower economic trend growth could be “the new normal”. Likewise, after a major financial collapse and the policy responses that followed, historically low interest rates and inflation may also become “the new normal”.
But some things should be called what they are – “not normal”. Having a stock market that has doubled since 2009 while the economy grew at a 2% rate, is “not normal”. Having real median household income fall during an economic recovery is “not normal”. Having the long-term unemployed account for almost 40% of all the unemployed nearly five years after the recovery began is “not normal”.
And this is the closing:
So, for many issues the level of risk abated, but for none did it disappear. And new issues arose. Thus, there might be fewer hot spots, but there are many more very warm ones. So after five years we have a recovery that has a large mix of the “new normal” and the “not normal” thrown in. Policymakers would be wise to recite the Serenity Prayer:
God, grant me the serenity to accept the things I cannot change,
The courage to change the things I can,
And wisdom to know the difference.