THERE is a spring in America’s step these days. A revision released this week raised annualised economic growth in the third quarter to 3.9%; it has averaged more than 4% in the past two quarters. The irrepressible stockmarket keeps hitting new highs, the most recent on November 26th. Job growth is accelerating. This is all the more remarkable because the rest of the world has hit the buffers. Japan has slid into recession, Europe is flirting with deflation and China has cut interest rates as growth flags. On November 25th the OECD, a club mainly of rich countries, said its members’ economies will grow just 1.8% this year and 2.3% next, about half a point slower than projected in May. Risks, it said, are on the downside.Why the divergence? In part, it is a statistical quirk. America’s economy shrank in the first quarter, so its recent strength is from a low base. Output in the third quarter was up an unspectacular 2.4% from a year earlier; the pace of growth in the current quarter will probably be similar. That is still much better than the rest of the world, though, for which there are two main reasons: trade remains a small part of America’s...
from The Economist: Finance and economics http://ift.tt/1HIqL1K
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