We are not Alone in Hoping for Economic Recovery
Good for All
In times of hardship, we tend to pull in and focus only on ourselves. Isolationism worked for a time in the past, but all economies are now global economies. No country functions as an island anymore. Consequently, economic recovery needs to be global economic recovery. International trade and banking require the whole system to be in good working order for all of it to reach optimal levels.
Encouraging News from Abroad
Many countries are reporting improved economic conditions in the fourth quarter. According to an Associated Press report, China’s figures are the best they have been in a year. Robust growth in retail sales, investment, and factory output combined with the smallest fall in exports since 2008 compared to the same month last year (1.2%) show China is beginning to make a serious recovery effort. Asian markets have rallied of late on encouraging global economic news and the aversion of any debt related problems in Dubai.
All Eyes on Us
Global recovery is important for all, but U.S. recovery is a key indicator that the world looks for in deciding how much confidence they should have in long term recovery overall. Sales in the fourth quarter for retail markets in the U. S. have not been robust, but have not been in decline either. The Commerce Department reported that November retail sales rose 1.3%, the economies best showing since August and exceeding most economists’ predictions. Another encouraging sign was a 2.8% increase in sales at electronics and appliance stores. This is usually a sign that consumers are feeling more confident by shelling out money for large ticket items such as TV’s and refrigerators. The rest of the world is just as interested in these numbers as we are since many of the items being purchased come from around the world.
Generally Upbeat Information
The overall economy grew an estimated 2.8% in the 3rd quarter which was the first increase after a year’s worth of declines. Analysts warn that the expansion could be short-lived if the unemployment numbers don’t begin to brighten up, as well. A fall in the 10% unemployment rate in the first half of 2010 will be essential to continued strong recovery. In November, sales were strong in other sectors with the exception of autos. When autos were factored out, retail sales rose 1.2% for the month which was three times what analysts expected. The economy continued to be a mixed bag with increases in some areas like department stores, but unexpected falls in areas like furniture.
U.S. More Sensitive to Global Economy than ever Before
In past years, the U.S. led the global economy. Now, we are an equal partner with most and following others like China. This is a new position for the American people and American economists. The ability to predict what will happen next will be more difficult than ever before. Fluctuations from around the globe will affect the U.S. recovery more than ever before. The worst recession since the 1930’s will not recover the same way as that one did 80 years ago.