US Consumer Riding High

• Economic slowing may be offset by its secondary effects — lower energy costs and interest rates.
• Facts about consumer behavior could justify optimism about US growth.
• US consumers alone represent the biggest economy in the world.

While I was traveling in Michigan and Minnesota last week, several things became apparent to me. Concerns about the economic slowdown in China and the rest of the world are real, but I also saw signs that these fears may be overpowered by a true sense of life improving in the United States.

Rocked Up and Down

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If corporate earnings flatten in the middle of the US expansion, we can chalk that up to global excess capacity and the strong dollar.         

After Waves of Weakness, Is World Recession Next

• Asian neighbors and commodity exporters were the first to feel the effect of China’s waning economy.
• The stronger US dollar and weaker global growth have had a second-order impact on US manufacturers.
• Lower energy prices may serve to accelerate consumer spending in the third wave after China’s slowdown.

China’s spectacular pace of economic expansion has ebbed, and the tides of this slowdown have washed over other countries and markets in a series of waves. Let’s consider the impacts for global growth and the US economy in particular.