Good news — shhhhh

June 12, 2014, 10:49 AM UTC
contract Armin Harris
Kyle Bean for Fortune

I want to tell you a secret, but please don’t tell anyone because that would ruin it. The secret is this: The U.S. economy is in a sweet spot right now, a rare, not-too-hot, not-too-cold equilibrium that visits us infrequently and fleetingly. I say fleetingly because once it becomes widely known that we are enjoying a little bit of economic Eden, our paradise will be lost to irrational exuberance in the stock market or housing market, or a run-up in interest rates–in other words the effects of an overheating economy. Ask the average joe, or the average CEO for that matter, how the economy is right now, and most would say lousy. In fact, the economy isn’t lousy at all. Not only is it pretty good, but it’s also improving. Yes, I know that for many people and companies things could be a lot better, but chances are they will be soon.

So again, speaking in confidence, let me make my case. Take jobs. Unemployment bottomed this past decade in May 2007 at 4.4% and quickly peaked at 10% in October 2009. Joblessness remained stubbornly high for a good two years, after which it began a steady march down to 6.3% in May, when employers added 217,000 jobs, finally making up for all those lost in the Great Recession. Question: Which way do you think the unemployment rate goes from here, up or down? Exactly.

Yes, GDP growth in the first quarter was actually negative, but that really was a slow building of inventories and a weather thing–a hiccup if you will. Remember, for many of us what we just went through could well have been the biggest economic downturn of our lifetime. It follows that the recovery has been long, slow, and uneven. (The first quarter was an uneven part.) Going forward, the dismal scientists are looking for the economy to grow by 3% or even 4% in the second quarter. And look at cars. Annualized new-vehicle sales hit 16.8 million units in May, the highest since July 2006. In fact, sales have been averaging above 16 million units every month this year, a streak not seen since 2007.

The housing market has been improving for years and continues to climb. Data provider CoreLogic reports that 95 of the 100 largest metro areas sport higher housing prices than a year ago. True, the run-up is slowing, but that’s probably a positive, since nationwide home prices are only 14% below their April 2006 peak.

All this getting better hasn’t been lost on the stock market: The S&P 500 is up some 5.5% year to date and over 185% since the trough of March 2009. Equities are a leading indicator, but of course no one knows how much further stocks have to run. As for interest rates, the 10-year Treasury is still around 2.5%, confounding those who have been predicting for years that rates would climb. At some point–and I would bet soon (although Europe is a huge deflationary force out there, with German government 10-year bonds yielding a rock-bottom 1.4%)–yields will turn, but for now, all’s quiet on the interest rate front.

Oh, and just one more thing. Remember when S&P downgraded U.S. debt? Just the other day the rating agency affirmed our nation’s AA+ rating, but it also tantalizingly said, “We could raise the rating to AAA if we see additional evidence of bipartisan efforts that signal a lower degree of political brinkmanship around fiscal policy decisions, coupled with a general government debt burden decline more pronounced than we currently expect.” That’s right, even Washington is getting in on the act by–surprise, surprise–behaving!

So enjoy the improving employment picture, GDP growth, a strong housing market, a zippy stock market, low interest rates–and quiescent politicians to boot. Just please don’t tell a soul.

This story is from the June 30, 2014 issue of  Fortune.

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