There’s been quite a bit of economic news this week, and nearly all of it is quite good. Today, for example, we saw very encouraging news on consumer spending, personal income, orders of durable goods, and national jobless rates. The news comes on the heels of revised GDP data, which was also heartening.
In each case, the numbers aren’t just good, they’re better than nearly anyone expected. Neil Irwin makes the case today that the U.S. economy “is plugging along better than you thought.”
Essentially, the evidence is turning against two of the biggest reasons to worry about the economy — that incomes weren’t rising enough and that business investment was drying up. The biggest dark clouds on the horizon aren’t looking so dark anymore. Together, the reports were enough to push Macroeconomic Advisers’ estimate of fourth quarter gross domestic product growth up four-tenths of a percentage point, to 1.4%.
The personal income number is perhaps the single best piece of news in the day’s reports…. Some of the details are even better. Because prices fell amid cheaper gasoline, inflation-adjusted incomes rose even more, a up 0.8 percent. And the rise in incomes was driven in large part by an increase in wages and salaries — which is to say, more money in the pockets of workers, not just a rise in investment income.
Irwin added that the combined evidence is “a nice Christmas gift for anyone hoping to see a better year in 2013.”
That’s true, and it’s good news. State economies are looking better, housing is picking up steam, the consumer market is looking better, and even national GDP is grounds for optimism. All congressional Republicans have to do is not needlessly create a recession. Oh wait. Just as the recovery starts to look even stronger, it’s tragic to realize how likely it is that GOP policymakers will set the nation backwards, with a crisis they created and chose not to resolve.
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