U.S. Shoppers Buoy the World's Exporters

Not long ago the U.S. economy seemed a spent force, with tapped-out consumers, subpar growth, and the same sad long-term destiny as Japan. China was the new engine pulling the rest of the world: The mantle had been passed.

That may have been a little hasty. The U.S. once again is emerging as a main driver of global growth—and just in time, as Europe teeters on the edge of recession and China’s economy decelerates. An improving job market, rising stock prices, and easier credit are combining to lift U.S. consumer confidence and spending, which rose 0.8 percent in February, the biggest increase in seven months, the Commerce Department reported on March 30. “We’re entering a sweet spot for the economy,” says Allen Sinai, chief executive officer of Decision Economics in New York. “We’re in a self-reinforcing cycle,” where faster employment growth leads to higher household income and increased spending.