The economy: At last, a proper recovery

Back at work, and liking it

THE American economy has technically been out of recession for six years. It is finally starting to feel like it. Millions of new jobs are sprouting. Many who had given up looking for work are trying again—and succeeding. Wage growth is picking up. But the economy is far from full strength: the Federal Reserve may have to support it for years to come.America is thriving for a few reasons. It is a relatively self-contained economy: foreign trade is only equivalent to 30% of GDP. So America feels other countries’ pain only faintly. While many governments are tightening belts, America’s is not: for the first time in five years, public spending as a proportion of GDP rose in 2014. American shoppers are flush with cheap credit. Lower oil prices also help, since America is still a net importer of the stuff.The labour market was ugly in the years immediately after the crisis. But now it is the star of the catwalk. Between 2011 and 2014 only eight countries saw bigger falls in their unemployment rate, according to the IMF. At 5.7%, America’s is one of the lowest in the OECD, a club of (mostly) rich countries. Firms...



from The Economist: United States http://ift.tt/1KNT2od