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There’s no question that the U.S. economy remains incredibly fragile: unemployment is high, growth has only been anemic, and rhetoric in Washington is only beginning to ramp up before the election.But when looking at the country’s global peers — especially in Europe — things start to look not just middling, but surprisingly robust.
Take the U.K., which is in substantially better shape than periphery neighbours. The country just revised lower the economic contraction it experienced in the first quarter and austerity measures are continuing to strain whatever soft recovery was hoped for.
The U.S. still faces tough macro headwinds as it heads towards 2013, but with a resurgent manufacturing industry, healthy demographics, and relatively stable markets, there are a few reasons to be glad to work on U.S. soil.
For years as China rose and U.S. manufacturing declined, people said those jobs were gone for good. But since 2010, U.S. manufacturers have added some 489,000 jobs. Gains are coming from improved competitiveness, which could bring as many as two to three million jobs back to the United States. Manufacturing unit labour costs declined 10.8 per cent between 2002 and 2010, a decrease matched only by Taiwan. Auto manufacturing has been an area of strength, accounting for 1.12 per cent of GDP growth last quarter, about half of total growth. Other strong areas in U.S. manufacturing are computer and electronic products, food and beverages, and chemicals.
Of 227 countries and territories ranked by the CIA World Factbook, U.S. GDP per capita remains in the top 5 per cent, behind natural resource heavy waits like Qatar and the U.A.E. GDP per capita currently stands at $47,200. In this chart from the St. Louis Fed, the rate has increased steadily since the 1960s, even after recessions have taken some bite from it. Already in 2010 and 2011, GDP per capita has re-accelerated as the overall economy begins growing.
American consumers and businesses have relative ease when accessing credit markets -- whether in opening a credit card or obtaining a revolving credit facility. Robust credit agencies and ratings firms provide financial institutions with the ability to judge those seeking credit accurately. Activity by ratings firms that resulted in the 2008 financial crisis put some of that into question. But overall bank lending has returned to healthier levels; measurements from the Fed's H.8 report puts the figure of loans and leases held by the nation's commercial banks at $7.1 trillion, up $315 billion from year ago levels.
DoingBusiness.org rates the U.S. as the seventh best country in terms of contract enforcement. The average time for a dispute to be resolved through American courts is 300 days, 42 per cent less than OECD countries. Costs as a percentage per claim are also less than elsewhere, at 14.4 per cent. That said, the U.S. suffers from similar issues seen overseas (a strained and extremely complex judicial system).
The U.S. is home to wildly inventive entrepreneurs who have shaped industry in nearly every form. Take e-commerce site Gilt Group, founded in 2007. In less than four years it has become the leader in an industry set to top $6 billion in sales by 2016. The U.S. Patent and Trademark Office has had difficulty keeping up with all the new ideas sprouting from citizen minds. Last year a record 241,977 domestic patents were filed, nearly four times as many as in 1963.
Countries in Europe and Asia are facing serious concerns on projections that their populations will begin declining over the next few decades. The United Nations estimates that between 2015 and 2020, Germany, Japan and Russia will all see populations contract. The picture is rosier in the U.S., where immigration will offset a relatively slow birth rate. Without that boost, things wouldn't be as robust. The CIA forecasts 13.8 births per 1,000 people in the U.S., placing it 148 out of 221 countries and territories.
Forecasts for future energy generation in the U.S. remain surprisingly robust. The U.S. Energy Information Administration projects that the country could halve its reliance on total energy imports under the best scenarios, and under higher consumption scenarios could lower imports from 24 per cent today to 17 per cent in 2035. The EIA estimates that most of the gains will come from increases in natural gas and renewable energy production as a portion of total energy generation. In fact, the EIA sees the U.S. becoming a net liquefied natural gas exporter in 2016 and an overall net exporter of natural gas in 2012.
Inflation has remained relatively tame, even as the Federal Reserve aggressively targets monetary policy to stimulate job growth. In this chart from the St. Louis Fed, you can see how the change in consumer prices has remained at or below 5 per cent for more than a decade.
Even with a debt ceiling crisis that pushed the country to the brink, the U.S. remains a safe haven compared to other nations: just this month Argentina unexpectedly nationalized energy giant Repsol YPF, wiping out investors. Even the European Union faced a ruckus when the fate of the European Financial Stability Facility was held by Slovakia, which had refused to sign off on the bill.
The U.S. has a large and growing labour force, even as the baby boom begins to filter out in retirement (which will weigh on consumer spending over the next decade). But compare that to rapidly growing countries like China, whose ageing population will cause shortages in labour and put strains on pension funds. The U.N predicts that the proportion of China's population over 60 will rise from 12.3 per cent in 2010, to 17.4 per cent in 2030.
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