EU growth outstrips the USPosted: August 17, 2007
Europe’s economies are growing ahead of the US economy, according to the latest figures for the second quarter of this year. Growth across the 25 members of the European Union was 0.9% in the quarter, up from 0.8% in the first quarter and representing 2.8% over the year. Comparable growth figures for the US were 0.7%. The economies of the 12-nation Euro currency group also grew at 0.9% over this period.
In a recent UN report on world economy the major European Union powers were chastised for not contributing enough to global consumption. The fear being that if US consumption falls radically for any reason it could cause a hard fall in the global economy. US consumers cannot continue to consume foreign goods at current rate based on the report. The Europeans claim that they are doing their job boasting the above mentioned growth figures, but we all know that domestic market growth still doesn’t answer the global economic problem… its all about dominoes.
CNN’s Money Line writes today that jobs are up and the latest consumption figures are the highest for this year so far. Blue chips rally with the positive news.
During the past weeks I’ve read articles about cooling housing markets in the US and just today I read that housing construction is starting to level off in Finland, which has one of the highest national growth rates of any European economy. US rates on 30 year loans are starting to drop… maybe I should think about refinancing. Some estimates are saying that the price of petrol at the pump will come back down to $2 per gallon, which would be great news in light of my 15 miles per gallon SUV.
I am thinking what is happening and what will be the outcome? It would only take a misplaced comment like the ones that the head of the Fed was issuing this fall to break the delicate balance and start the downward spiral. Then again if the Fed manages this balancing act and the protective Europeans will start to buy US goods with their strong Euro, then this could all turn out quite nicely.
I am personally trying to do my best to resolve this global dilemma by promoting EU market entry for US software products. I don’t expect to make a huge dent to the US trade deficit, but I promise to do my best.