Our take: An interesting article examining the move toward economic prosperity at the beginning of 2012 and the downturn in recent months. The author seeks to examine the subtle causes of this downturn and extrapolate what the near future holds for America's economy and how the Federal Reserve will act to save us from an economic "cliff" at the close of the fiscal year.
As recently as February payroll growth was running at 250,000 a month. Many of the headwinds that had held back growth for so long were abating. State and local government lay-offs have eased, and housing, though deeply depressed, has been reviving: both sales and construction of new homes are rising, as are prices, by some measures.
The abrupt reversal of mood recalls both 2010 and 2011, when a promising burst of growth in the early months petered out in spring and summer. Last year the culprits were obvious: Libya's turmoil had sent petrol prices sharply higher, Japan's tsunami disrupted supply chains, and over the summer politicians flirted with defaulting on the national debt.
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