Yesterday (July 31, 2013), the US Bureau of Economic Analysis – published the – US National Income and Product Accounts – for the June-quarter 2013 (the advanced estimates – subject to later revision). The US economy continues to grow but at a fairly sluggish pace. There will no significant incursions into the unemployment rate as a result of this performance. There was a slowdown in the contractionary impact of the fiscal drag coming from the government sector with the federal government’s negative contribution being reduced and a positive contribution to growth from State and local government spending (a rare event these days). There is still a huge output gap in the US (my estimate – around 10 per cent) and no signs of an inflationary surge. Combining that information with the parlous state of the labour market indicates that the US federal government should be increasing their net spending rather significantly at present.