The US economy remains in limbo: neither pulling away from nor succumbing to pressure from the credit squeeze, falling house values and high oil prices. With only one quarter of negative growth – the final one of 2007 – the jury is still out on whether the US has had or will have a recession. Growth in the first half of this year was weak but positive, boosted by tax rebates, though there are renewed concerns about a double-dip downturn around the turn of the year.

The absence of a full-blown recession owes much to strong support from trade – which has contributed on average 1.6 per cent to annualised growth in each of the past five quarters – and rapid gains in productivity, which have mitigated the oil shock. But most economists believe the Federal Reserve also deserves credit for navigating some difficult trade-offs between growth and inflation – not perfectly, but without making a big mistake on either front.