Highlights of the Global and U.S. Economic Outlook: We are in a Funk

May 10, 2016
Euquantstaff

A Roundup of Global Economic Trends: The Global Economy is in a Funk and Economic Uncertainty is Rising

  • Three big drivers of the world’s economy – US, China, Emerging market economies
  • The U.S. is the brightest spot in the global economy. It accounts for 17% of world output. It is also the strongest economy in the world
  •  Average growth rate in the U.S. since 1947 = 3.4%

So What’s The Problem?

  • Current growth rate in the U.S. = 1.4%
  • Projected growth rate until 2020 = 2.1%

How is the Rest of the World Faring? It’s Gloomy.

  • China – 17% of world output, 30% of world growth
  • China’s current growth rate  is 6.5% and falling. This is the slowest growth since 1990, dragging down global economy
  • The Euro Zone never recovered from the Great Recession (1.5%)
  • Russia, Brazil and Latin America are in recession and disarray
  • South Africa’s growth is slowing to a crawl – 1.4%
  • Bright Spots: India, Angola, Nigeria, South Korea, rest of South Asia and Sub-Saharan Africa
  • u  If US growth stalls, the global economy will enter a recession

 

What is the U.S. Economic Outlook?

The Upside

  • Best job growth in almost 10 years – 225,000 per month
  • Construction and Auto industries are strong
  • Inflation rates are low, interest rates are low

The Downside risks

  • Expansion has lasted 6 years –we are past due for a downturn
  • Consumer income is weak, retail sales are slow
  • Manufacturing sales are declining, the strong dollar hurts US exports
  • If the Fed raises interest rates, the economy will slowdown

Data sources include U.S. Census, SBA.gov, and data.gov

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