Economists are hastily upgrading their forecasts for the US economy after a series of surprisingly strong reports suggesting the so-called "soft landing" may be over and growth is accelerating.
Over the past week, surprises have come in stronger-than-expected reports on US job creation, the trade balance and retail sales -- all key contributors to economic activity.
Lehman Brothers chief US economist Ethan Harris on Friday boosted his forecast for fourth quarter 2006 growth to an annualized rate of 3.3 percent, a leap from the firm's prior call for just 2.0 percent growth.
"After slowing in November, the economy seems to have regained its stride," Harris said.
"With the last of the major data in, we are now revising fourth quarter GDP to an above-trend 3.3 percent. A wide range of indicators have been stronger than expected. Most important have been the strong consumption data and the surprising improvement in the trade balance."
The latest data defy predictions that the slump in real estate would filter into other areas of the economy, notably consumer spending.
The latest data showed US employers added a healthy 167,000 new jobs in December, with unemployment holding at a low 4.5 percent. Average wages were up 4.2 percent annually.
A separate report Friday showed US retail sales increased 0.9 percent in December.
Personally, I think we should blame Bush.
UPDATE: Bizzyblog has more on the story.