In the United States, housing prices have been sluggish, but firms’ production, exports, and profits have been strong because they have succeeded in tapping global demand, and this has led to an improvement in employment and income conditions and steadily underpinned private consumption.
Gradual materialization of pent-up demand, or potential demand, which had been contained after the Lehman shock and the Great East Japan Earthquake, seems to have also supported the economic recovery. Another advantage is the fact that spill-over effects of the European debt problem on economic activity have thus far been less serious than initially expected.