For much of the past year, economists have been waiting for the American economy to stumble. It has been hit by tariffs, labour disruptions, geopolitical tensions and renewed inflationary pressures. By conventional wisdom, such a combination should have slowed growth sharply and perhaps ushered in the dreaded spectre of stagflation. Yet the world’s largest economy has continued to expand. The temptation is to attribute this resilience either to political genius or statistical illusion.

Both explanations are inadequate. The more important story is that the United States possesses structural strengths that allow it to absorb shocks better than many of its advanced-economy peers. That does not make it invincible. But it does make it adaptable. America’s economic model has long rewarded experimentation and tolerated failure. Businesses can raise capital through deep and liquid financial markets. Venture capital finances risk. Bankruptcy, while painful, is rarely a permanent social stigma.

Companies facing rising costs are more inclined to reorganise, invest and innovate than to retreat into caution. This flexibility is often criticised for creating instability.........

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