While both have recovered – in fact, surpassed their pre-recession peaks – the structural damage caused by  BIS central bankers’ speeches  1  the crisis lingers. Indeed, our recovery has been primarily driven by higher household spending, while exports have lagged behind. Rather than a recovery in the usual sense, this looks more like a postwar reconstruction.
The biggest surprise in the U.S. economy this year has been inflation. Earlier this year, the 12month change in the price index for personal consumption expenditures (PCE) reached 2 percent, and core PCE inflation reached 1.9 percent.