Over the last several months, many pessimists have discussed how slow the economy is growing on the heals of one of the greatest recessions in the history of the markets. Maybe some of these headlines sound familiar. Greece Has Defaulted. Europe On The Brink of Recession. America’s Economic Crisis: the Fiscal Cliff. With each looming headline, the pessimism has continued to grow. But if you turn the news around, it offers us a reminder that, however much we complain about the slow-growth economy, the United States is still actually one of the most robust economies in the world.
If you look at the statistics, it’s hard to mask the truth. The U.S. economy is growing at a rate of about 2.95% for the year. Although this is slightly lower than its long-term average, it is well ahead of the European Union (1.28%) and the average growth of the G7 nations (2.16%). Still a look deeper at the global economy reveals an even better perspective. Japan has experienced two consecutive quarters of economic decline, which marks their fourth recession in the last six years. This slow economic growth has occurred despite their Fed’s attempt at a Qualitative Easing (QE) program, which is much greater than the U.S. program. Europe is believed to be on the brink of its second recession since 2008. China has experienced a drop in their GDP rate to about half the long-term average rate. And Brazil has still not climbed from their recession that started last summer.
You may be thinking, “but what about the nearly 6% unemployment rate” currently in the U.S? A quick look at the rest of the world reveals that only 13 of the world’s top 50 national economies have unemployment rates better than the U.S. This isn’t to say that 6% is a satisfactory unemployment rate. And it’s not to say that the GDP growth since 2008 is at a satisfactory rate. There is much room to improve in today’s economy. But compared to just about everywhere else, the U.S. economy is in a relatively good place.
Excerpts of the article written by Bob Veres of Inside Information.