Turnaround in US fuels rate hike debates

Even as the doves and hawks argue, the economy is likely to hum on in run-up to the Xmas shopping season

Published Thu, Oct 9, 2014 · 09:50 PM

BY SOME measures, the US has never had it so good.

Several recent statistics indicate that, at least on paper, the tepid economic recovery is becoming a red-hot boom, but this could fizzle out once the Federal Reserve stops its latest stimulus at the end of October, or if long-awaited wage increases fail to materialise.

US household wealth hit a record high in the second quarter, reflecting increases in the value of homes and retirement accounts; orders for durable goods expanded by the most on record in July, and the Commerce Department reported that gross domestic product (GDP) grew by a strident 4.2 per cent in the second quarter. In the most important data set for Fed policymakers, the jobless rate in September fell to 5.9 per cent, lower than even the most optimistic economists had expected at the start of the year.