No victory lap yet, but recovering US economy set to change attitudes

THE US unemployment rate has continued to fall in recent months, but American officials have refrained from declaring victory. The consensus in Washington has been that while the Great Recession is behind us, many economic indicators are improving, and that jobs are starting to come back, much of the economic recovery amounted to a work in progress, incomplete and vulnerable to disruptions.

That mixed economic reality explains in turn why US Federal Reserve officials have been reluctant to raise interest rates before the middle of next year when (or if) the economic recovery and job growth would point to a steady long-term economic recovery, making it clear that the American economy is close to full health.

Seen in the wider political context, public attitudes have reflected continuing anxiety about the condition of the American economy and job security. About 30 per cent of the unemployed were out of work for more than six months. Many of those with jobs were working part-time. Overall the level of job participation has remained at an all-time low. And most discouraging, salaries remained low and stagnant.