The outlook for the United States economy is better than it had been. The increased production of oil and gas is not the main cause of the strength, but it did lead me to revise my forecast upward. More on that in a moment.
The economy is growing largely because that’s it underlying trend. More people are available to work due to population growth, the general level of skills in the workforce is gradually improving, and physical and intellectual capital grows in magnitude and quality. For the economy to move off of the trend, a significant force must push it off trend.
We are still suffering structural harm from the recession’s aftermath and from the misguided policies adopted to fight the recession. However, these are not enough to overcome the economy’s inherent strengths.