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Don’t believe the hype – the US is still in a sorry state

In a waning presidential first term nothing compares to the importance of securing another one. In Barack Obama’s case, there is an added spur to his drive for re-election. The president believes the American economy will spring back to life over the next four years and cannot abide the thought of Mitt Romney reaping the credit.

Mr Obama’s impulse is more than understandable. However unearned, an economic revival that coincided with a Romney first term would easily be marketed as a “Romney boom”. But even if – as many expect – Mr Obama wins on 6 November, he should be wary of the growing belief in America’s impending manufacturing renaissance.

Too much of it is based on hope. America’s pallid – and again waning – economic recovery is already into its fourth year. The typical length of the business cycle is about seven years. It requires optimism at this stage to believe the patient is about to arise and go for a jog.

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