“Improving economic indicators merit applause but the economy isn’t picking up its pace along the road to recovery, said Mohamed El-Erian, CEO of fund giant Pimco.
Monthly jobs reports and housing data have come in stronger than expected.
However, Americans remain anxious over the fast-approaching fiscal cliff, a combination of tax hikes and deep spending cuts due to kick in at the same time at the end of this year.
The nonpartisan Congressional Budget Office has warned that failure on the part of lawmakers to deal with the cliff could send the economy contracting by 0.5 percent next year.
Fears that political brinkmanship may threaten progress on the cliff and elsewhere when it comes to longer-term fiscal reform can hamper the economy in a way that economic indicators fail to reflect.
U.S. consumer sentiment stalled at the end of November as uncertainty grew over federal tax and spending programs next year, a survey released on Wednesday showed.
“Americans are rattled by the reckless and previously unthinkable political behavior they have seen in Washington,” El-Erian wrote in a Foreign Policy OpEd. ”
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