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Investing Specialists

U.S. Economy Not So Fragile After All

Economists' one nearly universal error over the last two years was the expectation that the economy was fragile, says Morningstar's Bob Johnson.

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The economic news this week was shockingly good--almost too good to be true. Just as the economic indicators in August and October were just too bad to possibly reflect reality, December numbers, while excellent, probably include some statistical tailwinds.

Housing starts hit a recovery high, housing prices jumped more than 7% in 2012, inflation remained tame, and official retail sales refuted previous rumors of a disastrous holiday season. Manufacturing even looked better as industrial production had its second large improvement in as many months. (However, year-over-year data seems to be forming a rut at about 3% manufacturing growth.)

Robert Johnson, CFA does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.