Much of the recent news about the job market and the pace of industrial production has been strong. The surprises lately have been mostly favorable, and that’s a very good portent. But growth of income and spending in the economy has been weak, and there are reasons to fear the recent strength in hiring may not be sustained. It’s too soon to celebrate.
Is the U.S. economy finally taking off? Has it at last achieved what Federal Reserve Chairman Ben Bernanke once called “escape velocity,” private-sector growth strong enough that the economy no longer needs repeated boosts from fiscal and monetary stimulus? Or is this burst of speed going to dissipate as the last few did? Watching incoming economic data these days is like flying an airplane with two airspeed indicators. One says you’re picking up speed; the other says you aren’t.
By David Wessel, Mar 14, 2012 WSJ