Everyone seems to be getting very excited about the United States economy growing at 5.7%, the fastest in six years. Economists are saying people are beginning to spend again which means the recovery has kicked in.
Don't hold your breath. It could be a mirage.
Dr Doom, Nouriel Roubini has told Bloomberg that the 5.7% is an illusion. Most of it is related to the replenishing of inventories and that in any case, the US government is the one providing the spending money through its stimulus packages. "The headline number will look large and big, but actually when you dissect it, it's very dismal and poor," Roubini said. "I think we are in trouble."
Roubini warns that growth will contract to 1.5% in the second half of 2010. And that can only mean one thing. Unemployment in the US will continue to hover around the 10% mark which means that any pick up in the economy won't feel like a recovery at all.
It's a point summed up by Obama's chief economics adviser Larry Summers. He calls it a "statistical recovery and a human recession." Or put another way, an artificial recovery and a very real recession.
if US growth is just a mirage then what could be done to make it a reality?