The Fundamentals of the Economy Are Strong
Posted at 2 p.m. on Dec. 27, 2012
Neil Irwin explains why there is “good reason to think that 2013 will be the finally be the year that the U.S. economic recovery really feels like a recovery.”
“The biggest cramp the economy these last few years has been the housing sector, with sales near historic lows for half a decade… The number of housing units started, an 861,000 annual rate in November, is up 22 percent from a year earlier and up a whopping 58 percent from two years earlier.”
“The ratio of household debt to GDP has fallen from a peak of 98 percent at the start of 2009 to 81 percent in the third quarter, about the 2003 level. The cost of servicing that debt is down even more because of low interest rates.”
“With tax revenues climbing and major budget-cutting already completed, state and local government employment seemed to have bottomed out in May, and has been on a gentle upswing since.”
