Recent weakness is temporary, mostly from the jump in oil prices in the spring.
July 2, 2004: 12:20 PM EDT
By Mark Gongloff, CNN/Money senior writer
NEW YORK (CNN/Money) - Stop worrying.
Sure, we've gotten a string of some mediocre economic reports lately, but they're just bumps on the road to a glorious expansion.
After all, once the world's biggest economy gets moving, it takes an awful lot to stop it.
Since 1999, the United States has absorbed a Fed rate-hiking campaign, the bursting of a massive stock bubble, a controversial presidential election, massive terrorist attacks, two wars, corporate scandals and some other stuff we've probably forgotten about.
Despite all that, we only got a puny, three-quarter recession in 2001. Since then, the economy has grown for 11 straight quarters. In the third quarter of 2003, the pace of growth was the fastest in 20 years.
After the longest job-market slump since the Great Depression, employers have started hiring in droves, adding more than a million workers in the past four months. The improving labor market has started to boost the confidence of consumers, whose spending fuels more than two-thirds of the total economy.
June's disappointing job creation was just one month's data, and the decline in the Labor Department's measure of factory hiring isn't consistent with recent surveys of manufacturers.
Interest rates are still super-low, worm-burningly low, the lowest in more than 40 years, even with this week's Fed rate increase. With its target for a key overnight lending rate below the rate of inflation, the Fed still has its foot on the economy's gas pedal.
Speaking of gas, you might recall that oil and gasoline prices spiked through the roof this spring.
Unless you're off the grid, you've got to use oil and gas to live, work and do business. Higher energy prices, then, are a tax on everybody, keeping them from spending on more productive things.
Those higher energy prices are the likely culprit behind the recent slowdown in manufacturing activity, weaker consumer spending, slower car and truck sales and weaker hiring. Now that prices have come down, the economy can resume its forward motion.
Meanwhile, some of those inflation gauges that were flashing red earlier this year have gone dark again. Commodity prices have come down, as China's economy has cooled. Core inflation measures are still near historical lows.
A slightly slower economy and tame inflation only means the Fed will have less reason to cruelly jack up interest rates, which should keep Wall Street happy and make for a nice, easy unwinding of bond prices and a stable dollar.
What's to worry? It looks like the economy will keep growing, inflation will stay in check and interest rates will rise slowly.
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