With the latest batch of manufacturing data out, it couldn’t be more clear that the US economy is outperforming the rest of the world.
As far as big economy’s go, we’re pretty much the world’s last best hope.
But beyond the sheer numbers, a more interesting question might be: why is the US doing so good?
We’d point to a few reasons.
1. Excellent policy out of Washington DC.
No, really! Despite the utter dysfunction, the US has not (yet) succumbed to the global austerity wave, as fiscal policy has remained incredibly accommodative.
You can see that deficits compared to GDP have been extraordinarily high in recent years, meaning plenty of firepower.
Compare that to England (where David Cameron) came in with a mandate to cut spending, or the Eurozone where, well, you know… and you can’t not conclude that US policy is stellar.
2. A balanced economy, not too dependent on exports.
Unlike China and other hot emerging markets, the US is not all that export reliant. Sure, we trade massively with the ret of the world, but as a country that does not rely on its trade surplus for growth (unlike China), weakening of demand in Europe
This was at the centre (or near the centre) of the crash, but now it’s coming back on virtually all measures.
At a time when other economic factors are proving to be impediments, this is a nice (and arguably surprising) shot in the arm.
There are other factors that make the US generally good (a good climate for business, silicon valley, etc.). But these are three trends that define the current landscape.
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