There's good news and bad news today for the US economy. The good news is that consumer spending rose 0.7% last month, according to the Commerce Department. And, according to the Labor Department, the number of laid-off workers filing unemployment claims fell by 35,000 to 466,000 -- the fewest since September of last year and the first time since January that the number fell below 500,000.
Signs of a recovery? Not so fast. The bad news is that the Federal Reserve expects unemployment to remain high -- around 7% -- through 2012, and says it could take "about five or six years" for the economy to return to normal.
Given this forecast, Paul Krugman asks: "Why is anyone talking about an 'exit strategy'?"
"The truth is that policy should be piling on," writes Krugman, "not looking for the exit."