There is reason to look back on the year about to end with some satisfaction – not joy, but satisfaction. The until-now deeply troubled industrial sector last month topped its December 2007 pre-recession peak for the first time, and is over 20 percent above its June 2009 low. Autos led the way: motor vehicle assemblies are running at their highest level since 2005. The industry will produce about 15.6 million cars and light trucks this year, over one million more than in 2012, which was a good year. This sales boom was fuelled by a rise in auto-loan debt carried by consumers, which has pessimists worried that a wave of defaults might be lurking behind the good news, and optimists saying the borrowing proves consumers are more confident and, anyhow, can carry more debt because interest rates are so low. 

The housing industry produced equally good news. Total sales of new and existing homes will top five million this year, the highest in five years. Some 430,000 new, single-family homes will be sold, 17 percent more than last year—and last year was a good year. That has builders breaking ground for new homes at the highest rate in five years. The Federal Reserve Board’s decision to keep interest rates low during most of the year kept real estate agents as busy as car salesmen, as frantic buyers chased a dwindling supply of homes in a market in which bidding wars drove up prices. Due in part to the recent rise in interest rates, which are now a full percentage point higher than at the beginning of the year, the market seems to have cooled, but not very much. Pessimists expect the cooling to extend into next year unless rates fall, while the cheerier sort argue that the rate rise reflects the improved  economy and jobs market, good rather than bad news for the housing market.