Encouraging figures this week suggested the US economy is at or near the trough of the recession. Output shrank in the second quarter at 1 per cent at an annualised rate, sharply down from the first quarter contraction of 6.4 per cent.

The bold fiscal stimulus has helped. The package was not as front-loaded as it should have been; but it is having an effect. The Obama administration deserves credit for prompt action, but needs to follow through.