Q4 Paper Outlook — On-the-Cheap Sheets

People tend to forget that recoveries can be painfully slow, Paparozzi points out, and they can occur in stages. What had been holding the economy back this time was the narrow nature of the recovery. "Consumers were carrying the economy.

"Just in the second quarter, for the first time in three years, we saw evidence that the base of the recovery is broadening," Paparozzi says. "Some of the growth was indeed from defense spending (for the war in Iraq), but that wasn't the whole story. Consumer spending continued to hold up very well, and business capital investment was very favorable. As the base of the recovery starts to broaden, a recovery becomes harder to undermine," he adds.