Summary
- Certain economic indicators have been slowing down for some time now, raising concerns about the U.S. economic outlook among many observers.
- Yet, at the end of 2010Q2, consumption and corporate profits were already in expansion territory.
- Moreover, in 2010Q2, U.S. domestic demand will post its best performance in four years.
- Though disappointing relative to the magnitude of the past downturn, private employment is nonetheless bouncing back faster than during the 1991 and 2001 recoveries.
- Growing profits, mounting real GDP and a high confidence level among business managers should contribute to generate further job creation.
- Thanks to soft auto sales, consumer deleveraging and the recent drop in mortgage rates, the financial obligations ratio of U.S. households is already almost back to its historical average for the past 30 years. This bodes well for continued consumption growth.
- Finally, the dynamics of leading and coincident indicators do not suggest an imminent contraction in activity south of the border.
- As you might easily have guessed, though the chances of a relapse are not yet nil, it is not the scenario that we are betting on for the U.S. economy. Instead, the U.S. economy is actually approaching the threshold of expansion.
