Holder of a more recent vintage economics PhD than me, Noah Smith says "If you get a PhD, get an economics PhD". His foremost reason is that job market conditions are much better for economics PhDs than in most other fields. It's definitely worth a read if you're considering grad school, though I have some friendly amendments to offer:
On the positive side:
The benefits of having a stronger labor market than most other academic disciplines persist beyond the initial job placement. If you end up in a place that isn't a "good fit", you have a reasonable chance of being able to move. This is in contrast to some fields where anyone with an academic job must cling desperately to it knowing they have slim chances of finding another one, which makes them vulnerable to jerky administrators etc (fortunately my current institution generally seems to treat people well, even when they don't have to). Moreover, this means that the tenure process is slightly less terrifying - the economists I know who've been denied tenure have generally landed on their feet.
On the negative side:
Noah neglects to mention that, while the job market for economists is relatively robust, its still a fairly thin one (at least compared to most 'normal' jobs), so, while PhDs generally get jobs, they don't usually have alot of choices. This means is a problem to have strong preferences about exactly what type of job you want, or where you want to live.
I think he also understates the risk of failure. Its true that, once you're through the preliminary exams, you're not likely to experience "failure" as a single, discrete event. However, dissertations are a real struggle - even in the best case - and its not uncommon for people to drift away without finishing.
I like Noah's enthusiasm about the potential for "intellectual fulfillment" - and he's right, its pretty great - and rare - to have a job where you have freedom to pursue different ideas and topics with nobody telling you what conclusions to come to. And its neat to be around people who are are sharp thinkers and/or doing interesting research. But, that said, academics don't just get to think - they have to have their work validated by publishing, and the process of getting papers published is a real grind, and, on a bad day, can feel like a bit of a game.
Also, he says, "as an econ grad student, you'll have a life. Or a chance at having a life, anyway." Hmm... depends on what you mean by "life", and certainly not the first year (or really the second, either).
I think the big qualifier is "If you get a PhD" - while conditions for economists are much better than in many other fields, getting a PhD in economics still has a high cost. Not only does it entail giving up income - both during the grad school years, but also by forgoing more lucrative career options - it also means narrowing the set of career choices (there really is such a thing as being "overqualified," so having a PhD is limiting). I agree with Noah that the careers available to econ PhDs are generally desirable, but my advice to college juniors and seniors who aren't sure would be to try out working in the "real world" first - it may give you some perspective.
I've posted some general advice about economics grad school here.