As we move into the fourth quarter of 2014, I thought it would be a good idea to see how one of the experts sees the economy as of the end of the second quarter, and going into 2015. Below are Bill's comments on where we are headed.

Elise Couston: Where are we in the current economic cycle, as of the end of the second quarter of this year?

Bill Strauss: We have completed five years of the recovery / expansion. The "recovery period" is when you recover all of the lost output, and we did that a couple of years ago when the economy fell by over 4 percent. We are about 11 percent higher from the trough quarter. But, all in all, the recovery has come in at a fairly moderate pace.

Growth over the last 5 years is at 2.2 percent, which is the normal trend that we think about-anywhere from 2 to 2.25 percent. That is very disappointing when you really need to grow faster than the trend to remove the slack that was built up during the downturn. So, even today, while we have now five years under our belt for the expansion, there is still quite a bit of slack remaining in the economy.

Now, after World War II, recoveries typically lasted about five years, so some people are a little nervous about that, but, it really would take an economic shock to end an expansion. I think much of the risk is really beyond the borders of the US when you think about the political instability that is taking place both in the Middle East, as well as with regard to the Ukraine area. Economically, I think one of the bigger risks is actually in some of the Asian markets, in particular, China.