Indeed, the global nature of the pickup in economic activity encourages me to think that we are seeing a fundamental turnaround in confidence and spending propensities that is likely to be self-reinforcing. All told, the U.S. economy has apparently made the transition from weakness to solid growth.
However, even if these positive signs are borne out, the path of economic expansion will undoubtedly be uneven, and significant risks remain. One downside risk lies in spending by the household sector. Purchases of new houses and durable goods have boomed over the past several years, raising the stocks of those capital goods in the hands of households.