Vertical Divider

U.S. Financially Outperforming the ROW 
February 11, 2019
 
In the ongoing financial competition between the major regions of the world, the U.S.’s economy is surprisingly vastly outperforming those of China and Europe.  Tuesday’s services industry (non-manufacturing) data is exemplary; the U.S. services activity is still expanding, while Chinese growth is lower and slower – but it’s still growth, whereas in the Eurozone, the services industry in January barely grew at all. The better-than-expected U.S. jobs report offers a positive panorama of the economy’s strength in the rear-view mirror. But when directly surveyed, American consumers say their confidence is tumbling – a potential indicator of the future shape of the economy, since concerned consumers may trim spending and businesses may correspondingly reduce investment. Slowing economic growth elsewhere in the world could eventually impact the US. 
 
Investment manager Eurizon estimates that China is responsible for 15% of the US economy and 35% of Europe’s. If China’s economy continues to slow, America might find it’s built up a head of economic steam that overestimates global demand. Still, with trade negotiations with China ongoing, China’s growth may be dependent on the actions of the U.S.