Household spending on goods and services and housing has been strong throughout the expansion, and, more recently, business investment in capital equipment has surged. The increase in output has been accompanied by large increases in labor productivity that, since 2002, have been in excess of even the elevated pace of the second half of the 1990s.
To be sure, the rise in energy prices seems to have taken a toll on consumer confidence and spending most recently. But with financial conditions still accommodative, profits and cash flow still healthy, and incomes continuing to increase, most forecasters expect growth to remain solid.