Last week's news of a 5 percent economic growth rate for the third quarter, the highest in 11 years, got many economists excited.
So is this beginning of a growth spurt resembling the 1990s, when the expansion routinely totaled 3 to 4 percent per year?
"No, it is not" writes Jordan Weissmann, Slate's senior economics correspondent
. To be sure, "things are looking up," he says. The growth figure is indeed impressive. "The jobs market is moving along pretty briskly. . . . Families have started borrowing to spend again."
We should be happy for this, Weissmann argues.
"But it's worth keeping expectations in check," he notes. "Please disregard all references to the 1990s. The good times of the Clinton era were the result of giant productivity gains created by the Internet."
Productivity isn't booming anymore. "As much as the Internet loves to talk about robots, we are not in the middle of another technological renaissance," Weissmann maintains. "Rather, we're shaking off the last ill effects of the recession and housing bust."
Non-farm productivity rose 1 percent in the third quarter from the same period of 2013.
"The U.S. economy is getting hot enough to keep chipping away at the unemployment rate and eventually push up wages a bit — at least until the Federal Reserve feels compelled to raise interest rates. It's a good place to be. You can call it a comeback. But I wouldn't hold your breath for a boom."
Meanwhile, former Federal Reserve Vice Chairman Donald Kohn
predicts the current economic momentum will likely carry over into next year, "providing a solid base for sustained good growth and a pickup in underlying inflation."
The plunge in oil prices to five-year lows will give the consumer sector even more punch, the senior fellow at the Brookings Institution writes on Brookings' website.
"There are however, some clouds on the horizon that raise doubt about whether conditions will be right for the Fed to be able to lift its policy rate off of zero [next] year."
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