The economy is making progress, but still has a long way to go, says former Federal Reserve Vice Chairman Alan Blinder.
“When you suffer through the worst recession since the 1930s, healing takes a long time,” he writes in The Wall Street Journal.
While economic growth has decelerated over the past three years, jobs data are more important, says Blinder, now an economics professor at Princeton University.
Editor's Note: 'It’s Curtains for the US' — Hear Unapologetic Warning from Prophetic Economist.
“On the unemployment front, progress since 2010 has been slow but palpable,” he writes. After peaking at 10 percent in October 2009, the jobless rate fell to 7.8 percent two months ago. “[W]e have finally struggled back to the unemployment rate of January 2009,” Blinder says.
While big risks like the fiscal cliff lie ahead, there are several positive economic signs, such as the stock market’s four-year high, gains in consumer confidence and spending and a housing rebound, Blinder says.
Nonetheless, no boom is coming, and fiscal stimulus along the lines of President Barack Obama’s proposal a year ago would be helpful, Blinder says.
Economists’ share his mixed view after the government reported last week that GDP grew 2 percent in the third quarter.
“We are encouraged by the improvement we’re seeing in consumer spending and housing,” Dean Maki, chief economist for Barclays, tells Bloomberg. “These will be dominant themes in the fourth quarter too.”
But Nigel Gault, chief economist at IHS Global Insight, tells Reuters, "The economy still has only weak forward momentum."
Editor's Note: 'It’s Curtains for the US' — Hear Unapologetic Warning from Prophetic Economist.
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