The Economy Seems To Be Picking Up Steam Recent economic news has been positive: Consumer spending is up, the stock market is rising and big bank profits also are higher. Has the economy snapped back? David Wessel, economics editor of The Wall Street Journal, tells Renee Montagne there still are weak signs. For example, the unemployment rate remains at 9.7 percent.
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The Economy Seems To Be Picking Up Steam

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The Economy Seems To Be Picking Up Steam

The Economy Seems To Be Picking Up Steam

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RENEE MONTAGNE, Host:

Good morning.

DAVID WESSEL: Good morning, Renee.

MONTAGNE: So David, who is saying what?

WESSEL: Unemployment is still 9.7 percent and there are even more people who have given up looking for work. Industry, as a whole, is operating at only 73 percent of capacity. The average over the last 30 years is about 80 percent. And the economy is still addicted to the Fed giving away free money, essentially, to the banks.

MONTAGNE: Well, let's talk about corporate profits, and not just the banks, but other companies. Google has reported strong profits. Do these figures tell us whether we're really recovering?

WESSEL: We are just in the very early days of the season where companies report their earnings. You're right, Google said its profits were up 37 percent in the first quarter. They say online advertising is coming back. On the other hand, Alcoa, the big aluminum company, which idled one quarter of all its plants in the recession, had a loss for the first quarter and they're kind of mildly optimistic about the year.

JPM: But one thing we're seeing here is we ended this whole crisis with fewer bigger banks, and those bigger banks, like JPMorgan, have a lot of market power. They're able to get more profits because they can charge more for what they do because they have less competition.

MONTAGNE: You know David, the phrase, Great Recession, has really taken hold and now that it seems to be over do you think the name fits? Was it the Great Recession?

WESSEL: Now, what makes a recession great - what gives it that horrible honor - I think is whether - not whether it's long and deep, but whether it provokes some long- lived changes in the economy, and I frankly think this one is. I think the way that Americans look at business and the rules of finance and how they look at their homes and their retirement plans, will change as a result of this. So in my book yeah, it's the right word to use.

MONTAGNE: David Wessel, economics editor at The Wall Street Journal, thanks very much.

WESSEL: You're welcome.

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