By Dove Direct on Tuesday, 21 December 2021
Category: Trends

Look: the US Economy is Booming!

Welcome to the Dove Direct Print and Marketing Blog. Today's post, "Look: The US Economy is Booming," is a welcome viewpoint as we head into the Christmas weekend.  A Wall Street Journal article released December 21st, entitled "Booming US Economy Ripples World-Wide," supports our euphoria.  The report states that there is a soaring demand for American investments from overseas. This demand drives supply chains to stay on pace while driving up costs and pricing. According to JP Morgan Chase, "US consumers, flush with trillions of dollars of fiscal stimulus, are snapping up manufactured goods and scarce materials." In addition, "US economic output is set to expand by more than 7% annualized in 4Q, up from about 2% in the previous quarter, according to early output estimates published by the Federal Reserve Bank of Atlanta. That compares with expected annualized growth of about 2% in the eurozone and 4% in China for the fourth quarter."  Meanwhile, the good news is that the force of the American economy is inviting companies from abroad to invest in the US, based on the speculation that economic growth will continue to accelerate and outperform other major economies. Before we dive in, we would like to wish everyone a safe and happy holiday season.
 
Our Quote of the Day: 
"We need to have a strong economy that can create employment opportunities and that can also produce the revenue that we need to defend our country at home and abroad." — Bob Menendez

Container Ports Surging

Although recent news reporting suggests that the supply chain backup is a US problem, it may come as a surprise that major US ports are processing about one-fifth more container volume in 2021 versus 2019. Keep in mind that this uptick is happening despite volumes that are either flat or lagging behind 2019 level from European ports like Hamburg and Rotterdam. The busiest US container ports are running circles around their European and Asian counterparts in global rankings. Shipping data provider, Alphaliner states that volumes are surging. 

By comparison, European durable goods consumption is nowhere near the boom that is taking place in the United States, according to Fabio Panetta, a member of the European Central Bank's six-member board. According to data supplied by ECB, the consumption of durable goods has risen nearly 45% above 2018 levels in the US, whereas consumption is up by a mere 2% in the European zone.


US Economic Forecast
Some analysts predict that the US economy will likely expand by approximately 6% by the end of 2021, with another 4% in 2022. If this occurs, it will be the highest rate increases in decades. Deutsche Bank analysts suggest that the robust US economic rise can drive unemployment levels to their lowest in seven decades by 2023. Speaking of pre-pandemic versus current pandemic economic concerns, JP Morgan Chase forecasts that US economic output could move past the pre-pandemic path by early 2022. Conversely, output in China and emerging markets will remain about 2% below that path through 2023.


US Wages
According to the Bank for International Settlements, US wages have increased approximately 4% per year. At that rate, wages are above the pre-pandemic trend.  US wage growth is very favorable compared to a less than 1% growth for the eurozone.

Federal Reserve Chairman Jerome Powell stated after the central bank's recent meeting, "We threw a lot of support at [the economy] and what's coming out now is really strong growth, really strong demand, high incomes and all that kind of thing. People will judge in 25 years whether we overdid it or not."

Further, the Fed will move to rapidly scale back its Covid-19 bond purchases and begin the process of implementing a series of interest-rate increases starting next spring.


The Net-Net

While we contend that year-end analyses generally focus on business concerns, both internal and external, including the state of the economy and the conditions of the pandemic, it also makes sense to understand how the US economy is fairing around the world. This post offers a snippet of the discussions in larger economic circles, with JP Morgan Chase, the European Central Bank, Deutsche Bank, and other prolific global economic analysts and financial institutions. We feel the basic economic review of the US and global economy helps to shed light on our world standing. We implore you to contemplate exploring these economic trends for 2022 as you navigate your strategy for the new year. Thanks for reading "Look: The US Economy is Booming!"


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