This week’s economic numbers concerning the EU, specifically Germany, and China were poor. In the U.S. a number of reports were released and generally they were good. There is s stark contrast between the U.S. and the rest of the world at the present time and there are reasons why this exists, but also fears that it cannot persist.
The U.S. economy, as we all know, is driven by the consumer and at present he/she is working with record low unemployment rates and a massive amount of needed jobs to be filled. The U.S. economy is not reliant on exports to drive its engine. Exports are important and represent about 12% of the U.S. GDP, however, many other countries rely on exports as their driver. For China and Germany exports are far more important to them than in the U.S. They also have a large portion of their economies depending on the consumer but to a much lesser degree than in the U.S.
This simple fact explains why the U.S. is doing well and the rest of the world is not. The trade dispute between China and the U.S. is disrupting and it’s on a world wide scale. The U.S. is feeling the effects but not nearly as much as the export nations.