The US budget deficit is tumbling, according to the latest numbers. The combination of recent large cuts in public spending, and continued economic growth, is working well. The US economy is recovering on the back of the shale gas revolution, cheap energy to power more factory output, and the continued ability of the US to harness the digital revolution to business success.
Meanwhile, the EU numbers remain dreadful. Italy has been in recession for seven quarters, with economic output falling another 0.5% in the most recent quarter. Germany is down 1.4% on the last year but managed a very small increment to output in the first quarter of this year. France is in double dip recession, with the position continuing to deteriorate.
The UK economy looks as if it is now picking up. April was probably a stronger month than the previous half year has seen. There are welcome signs of more full time jobs, some increase in housing activity, and a pick up in consumer confidence. The London economy appears to be doing well, with continuing difficulties spreading the progress to all parts of the UK.
Some of the extra money being created is now finding its way into activity. Some will also find its way into rising asset prices. We see worldwide in the advanced country Stock markets that the susbtantial sums being created to promote growth are fuelling asset price rises. The authorities have to judge when to ease off the monetary accelerator in a way which does not damage the recovery but does prevent asset prices becoming unrealistic again.