Well, today's headline might only be at the top of the online edition and only for a few hours.
The good economic news come as quiet a surprise on this side of the Atlantic as well. I got the impression that most folks here don't expect it too last. Thus, consumer spending is not likely to increase, and in consequence our neighbors and the US are likely to continue to complain about our "selfish" economic policy.
Though the NYT points out: "German consumer spending, which tends to be tepid even in good times, contributed to the growth spurt, as the number of people working grew 0.2 percent from a year earlier to 40.3 million, the Federal Statistical Office said."
Bloomberg writes about record German growth (HT: David)
The increase in German GDP was the strongest quarterly gain since records for the reunified country began in 1991. First- quarter growth was also revised to 0.5 percent from 0.2 percent. Euro-area GDP rose 0.2 percent in the first three months of the year.
In annualized terms, the German economy expanded about 9 percent in the second quarter, said Andreas Scheuerle, an economist at Dekabank in Frankfurt. That puts it on a footing with emerging markets like China and India.
"Superman is wearing black, red and gold this year, Germany's national colors," said Carsten Brzeski, an economist at ING Group in Brussels. "But at some stage he'll become Clark Kent again. The economy can't keep growing at this rate."
The data nevertheless suggest Germany's economy, which contracted 4.7 percent last year, will grow "far more than 2 percent in 2010," Economy Minister Rainer Bruederle said in an e-mailed statement. In June, the Bundesbank predicted growth of 1.9 percent this year and 1.4 percent in 2011.
Wow, what's going on? Why is Germany doing so well right now? For once the US media does not mention the many existing and long-term problems that still haunt Germany. I am impressed.
Oh, and remember Nobel Economist Krugman's statements less than two months ago?
In an interview with the German business daily Handelsblatt on Monday, Nobel prize-winning economist Paul Krugman joined Berlin's legions of detractors, and took aim at the government's recently agreed to EUR 80 billion austerity package.
"I don't have a problem with trying to balance the budget in five or 10 years," Krugman told the paper. "The question is whether one should start when the economy is at 7 or 8 percent below its normal capacity and interest rates are at zero.... Now is not the time to be worried about deficits." Later in the interview, Krugman said, "the German austerity package is really a bad idea."
His concern is that German austerity could ultimately have a negative impact on an already fragile US economy and that Berlin is hoping to resuscitate its economy solely through exports. He said that other countries in Europe would suffer as a result of Germany's savings package. "Germany's consolidation policies don't just negatively effect the domestic economy, it also slows growth in other countries," he said.
Yep, Germany is the new bad boy. So is Germany to blame for the slow US recovery? Or is it the fault of US consumers, who are not shopping with their second and third credit card any longer?