ACCORDING to new data released today, America's economy grew at a 3.9% annual pace in the third quarter of this year. That was an upward revision from the advance estimate, of 3.5%. It came on the heels of a second quarter in which real output expanded at a 4.6% rate. Indeed, in four of the last five quarters GDP has increased by 3.5% or more (and by 4.5% or more in two of the last five quarters). The American economy hasn't strung together five quarters like that since the late 1990s. Neither is that the only encouraging indicator. Over the last year employment has grown at the fastest pace since 2006 and the pace of hiring seems to be trending upward.

It is so tempting to conclude that all is at last well in America. But is it? Take another look. Real output grew just 2.4% from the third quarter of 2013 to the third quarter of this year. That, of course, is due to the woeful first quarter, in which the economy shrank at a 2.1% annual pace; at least some of the robustness of recent figures is surely attributable to make-up of ground lost in the first three months of the year. The 2.4% year-on-year rate is entirely unexceptional, even by the standards of this recovery; indeed, it is close to bang on the trend since 2010. Meanwhile, growth in both wages and prices is remarkably weak. Growth in average weekly earnings has been just 2.8% over the last year: fairly normal for this recovery and well below the rates in past expansions. Meanwhile, the price index for personal consumption expenditures (the inflation measure targeted by the Federal Reserve) rose just 1.5% in the third quarter, down from a 1.6% increase in the second quarter.

And this is all occuring, of course, in a world in which the Fed's main policy rate is nearly zero (while its balance sheet stands at $4 trillion). Things are clearly still amiss in America when monetary policy can remain so far from normal while the economy revs up even as inflation and wage growth limp along at pitifully low levels.

Despite the absence of inflationary pressure the Fed is nonetheless preparing to normalise; the first rate hikes could come next year, and possibly as early as the first half of next year if American growth accelerates. Yet the Fed will surely be keeping an eye on the things to see which of several possible narratives might best fit this strange, strange set of datapoints. What sort of narratives?

One would be an economy in which recent GDP data paint a misleadingly rosy picture of things. Fast growth in the last two quarters could be part volatility and part a rebound from the snowy start to the year, in this story, and we should anticipate reversion to a slower growth rate more in keeping with the signals sent by prices and wages. This story, though quite plausible, becomes less attractive with each encouraging datapoint. This suggests the Fed should be watching closely for any sign of a growth slippage.

A second might be an economy that has gotten quite lucky, in its way. The American economy is relatively closed, and so a growth slowdown doesn't hurt growth very much via a trade channel but can help growth if resulting weak inflation is good for consumers. It might be the case that the economy is fundamentally unchanged from where it was a year or two ago, but has received a boost from the falling cost of petrol and other commodities (and perhaps also from the abatement of government deficit reduction). In this case the Fed should again be on the lookout, but for indications that disinflationary tailwinds are flagging or that the economy is approaching capacity, either of which trends could nudge up inflation.

A third might be a secular stagnation world. The Fed has finally succeeded in getting growth going, but it most likely has only managed this by creating dangerous and unsustainable increases in asset prices. In this story the Fed faces a nasty choice: to try to identify the most worrying sorts of excess and rein them in at the cost of growth, or to tolerate growing financial instability in hopes the fall-out is relatively harmless.

A fourth might be a world in which underlying productivity potential is finally growing nicely, thanks in part to information technology advances, new digital business models, and the tremendous boost from American energy production. These trends are allowing growth in output to run ahead of growth in employment. Yet technology is also keeping a lid on wage growth, thanks to possibilities for automation and innovative business models that tap into new sources of labour supply. In this world, the Fed need not worry much about overshooting; indeed, the hotter it runs the economy the more quickly new cost-saving technologies will be exploited.

Any of these might be true. What the Fed ought also to remember is that it remains stuck within one well-established narrative: that of the zero interest rate world. In that world, growth can chug along nicely in the absence of nasty surprises, but quickly falters when they arise. In that world inflation expectations can be nudged upward by expasionary policy or rising commodity prices but always plateau and eventually begin falling back toward zero. And in that world the time at which a low-inflation economy is expected to be strong enough to handle sustained interest rate increases always looms just over the horizon.

The American recovery has been looking impressive lately, but that is nothing to take for granted, not while interest rates and inflation are so low and the rest of the world economy so shaky.