The word is out that the value of goods and services produced in the US has overtaken its pre-recession levels after 15 quarters, taking three times longer than the average for 10 previous recoveries since the Great War of the 1940’s. The GDP had expanded at a mild rate of 2.5% in the period from July to September, the fastest pace in a year and up from 1.3% in the prior three-month period. GDP had climbed to $13.5 trillion last quarter, topping the $13.33 trillion peak reached in the last three months of 2007.

Consumers had reduced savings to boost purchases and companies stepped up investment in equipment and software, although the biggest drop in incomes in two years raised concerns about whether the spending increase will continue. In terms of the labor situation, the number of Americans with jobs last month, 131.3 million, was lower than the 138 million workers in December 2007, when the 18-month recession began.

The global stock market surged ahead last week as European leaders agreed to expand a bailout fund to stem the region’s sovereign debt crisis. The S&P’s 500 Index jumped 3.4 % to 1,284.59, extending the biggest monthly rally since 1974. Treasuries sank, pushing the yield on the 10-year note up to 2.39 percent from 2.21 percent the day before.

The USA’s central bank, Federal Reserve, policy makers are developing options for further monetary easing even as the economy is gaining grounds from the sorry state of affairs. Policy makers pledged in August to hold the benchmark interest rates near zero through the middle of 2013 so long as joblessness stays high and the inflation outlook is subdues. Excluding inventories, the economy grew at a 3.6% annual rate last quarter, up from a 1.6 percent in the month of April through June.

All of the above suggests a mild recovery in the US economy, with investors heaving a huge sigh of relief. Investors across the world are hoping that the coming of the New Year may herald a shining light out of the dark clouds which had hovered over the global economy for a prolonged period. Welcome back readers!