It has been rush of good news on the US economy, but last week nearly saw it all spoilt. Thank goodness for Friday, because news out then just about saved the day, and stopped the good turning to bad.

Just to remind you: US consumer confidence has hit a five year high, US house prices are up, the US fiscal deficit is falling fast, and US banks suddenly seem to be well capitalised. For more, see: US debt is falling: does this prove austerity does not work?   US consumers create recovery, or does recovery create US consumers?  
US banks see biggest profits ever: is the US back  and 
US economy close to shaking off last vestiges of the finance crisis 

But last week saw the latest Purchasing Managers’ Indices (PMIs) on the US economy, and they were not so good. The PMI tracking US manufacturing, and produced by ISM, fell to 49, a four year low. More to the point, since any reading under 50 points to contraction, the index suggests that the US manufacturing industry may be in recession. The PMI tracking US non-manufacturing improved in April, but with a reading of 53.7, it was nonetheless the second lowest score in nine months. Together the two indices suggest the US is growing at an annualised rate of around 1.5 per cent in Q2, from 2.4 per cent in Q1.

All eyes turned to the jobs report, which was out last Friday. This is one of the closest watched of all US indicators. In the end the report was a relief. No less than 175,000 workers joined the US non-farm payroll in May. According to the latest data, US non-farm payroll has increased by just 50,000 short of one million so far this year.
Okay, there is a chance that the latest data maybe revised downwards, but so far it looks good.

Right now, with a few exceptions in South East Asia and Latin America, the US economy seems to putting on just about the best set of data anywhere. There is even talk of manufacturers returning to the US. Yesterday Apple announced plans to manufacture one of its latest products in the US, and the latest Google/Motorola phone is being made in the US.

The US still has problems, perhaps the main ones being growing inequality, and falling median incomes. See: Will USA living standards ever again be as high as they were in the last century? 

And US student loans has the feel of a potential bubble in the making. See: Student Debt and the Crushing of the American Dream, by Joseph E Stiglitz 
But at least talk that the US is on a one way ticket to bankruptcy seems to be considerably wide of the mark. See: The scaremongers are wrong: the US is not even vaguely close to going bust 

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