We've had quite a bit of good economic news this month. A huge European bailout of Greece raised hopes that a weak global recovery can gather steam. In the U.S., the Dow Jones Industrial Average touched 13,000 for the first time since 2008. And America's unemployment rate has gone down for five straight months, now sitting at its lowest rate since the Great Recession began. But there are plenty of clouds still looming. Oil prices have spiked to their highest level in nine months as Iran cut off crude shipments to the U.K. and France. And despite Greece's reprieve, Europe remains on the brink of a debt disaster. So is the U.S. economy really on the mend — or is this just a lull before the next downturn?
Don't get your hopes up: "Economists are screaming, 'Recovery Winter,'" says Derek Thompson at The Atlantic, but that's exactly what they were screaming this time last year, and things didn't quite work out as experts promised. This time around, we're facing the same headwinds that foiled the rebound in 2011 — Europe's continent-wide recession, spiking oil and gasoline prices, and yet another looming showdown over lifting the debt ceiling. So brace yourself for more pain, because this could be just another "false recovery."
"False recovery 2.0: It's beginning to look a lot like 2011"
The economy is getting better, but slowly: "It's time to declare a real recovery underway here in the U.S.," says Rana Foroohar at TIME. Of course, "there are still some big potential speed bumps" ahead. "The stimulus effect is over," and government belt tightening will be a drag on all rich economies, not just ours. The U.S. has come pretty far in "digging itself out" of the debt crash. But it will still be a few years before credit is as accessible as it was before, and that will keep a lid on growth.
"Is America's economic recovery real?"
The recovery is real, and so are the threats: "The U.S. recovery is gathering strength," says Scott Boyd at The Christian Science Monitor, but "a slowing Chinese economy" could stop us in our tracks. The millions of new wage earners created during China's manufacturing boom were supposed to be the new engine of global economic growth, but Chinese consumers are cutting their spending. Unless that changes, we could be in for another global "calamity that ultimately brings down all the major economies."
"U.S. recovery real — but vulnerable"
THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER
- What would a U.S.-Russia war look like?
- Why the West should let Russia have eastern Ukraine
- 9 Harvard dropouts who became fabulously successful
- Why you should stop believing in evolution
- 7 grammar rules you really should pay attention to
- What is Molly? Everything you need to know about the party drug
- The dangers of our passionless American life
- How China sparked an Asian frenzy for killer submarines
- The real reason conservatives should be outraged that police killed a white youth
- The next pandemic
Subscribe to the Week