SMOKINCHOICES (and other musings)

January 1, 2015

U.S. outlook looking oddly ‘rosy’

GOP claims our ‘do-nothing’ President is worst ever;  

but he seems to have done everything RIGHT    

And this of course is in spite of doing everything imaginable to stop and block all aspirations President Obama had to serve the needs of the people.  Imagine how much more could have been accomplished had the Congress been willing also to get things done and cooperate on the jobs creation initiatives which were desperately needed  so that all Americans could be sharing in the economic survival which mostly  only the corporate world and it’s cohorts are experiencing.  

We were in tragic circumstances as Obama took office, yet look what has been done in spite of the Republican party.  Tho our nation has long been a global leader, at this point, we find ourselves in a strange position as other nations struggle to stay afloat and seem to be drifting into more economic stress.  Thank you President Obama for the leadership you have shown. . . for indeed, you have made  remarkable strides.  Many of us are grateful.   Jan


Jobs & the economy

U.S. outlook much better than rest of world’s

By Christopher S. Rugaber ASSOCIATED PRESS

WASHINGTON — The United States is back and ready to drive global growth in 2015.

After long struggling to claw its way out of the Great Recession, the world’s biggest economy is on an extended winning streak that is edging it closer to full health. But the new year doesn’t look quite so bright in other major countries.

  • China is slowing as it makes the transition from investment to consumption.  Japan has slid into a recession.  Russia appears headed for one. Europe is barely growing.

And the U.S.? Six years after its financial system nearly sank, the U.S. is expected to grow in 2015 at its fastest pace in a decade. Its expansion from July through September — a 5 percent annual rate — was the swiftest of any quarter since 2003.

That pace is likely to ease.  Still, the economy is expected to expand 3.1 percent next year, according to a survey by the National Association for Business Economics. It would be the first year of growth of at least 3 percent since 2005.

The acceleration of U.S. growth is a key reason the global economy is also expected to grow faster — about 3 percent, up from 2.5 percent in 2014, say economists at JPMorgan Chase & Co. and IHS Global Insight.

Plunging oil prices are a big reason for the optimism. Prices have been cut roughly in half since summer. The drop, along with more fuel-efficient cars, will save the average U.S. household $550 on gas next year, the U.S. Energy Information Administration predicts. That means consumers will have more to spend on items such as cars, furniture and appliances.

Lower oil prices also will help Europe and Japan, and the global economy should expand faster than it did this year, economists say. But the divergence between the United States and most of the rest of the world is striking and carries risks. Big exporters, from China to Germany to Japan, will depend heavily on a recovering U.S. to boost their economies.

A pickup in global growth “is highly dependent on the assumption that the U.S. economy continues to improve,” said Douglas Porter, chief economist at BMO Capital Markets. “If that doesn’t play out, there’s not much left for the global economy to fall back on.”
Even if the U.S. economy does strengthen further, the rest of the world could struggle. For one thing, faster growth probably will lead the Federal Reserve to raise interest rates in 2015, which could draw more investment from abroad. The flow of capital into the U.S. would raise the dollar’s value and potentially cause destabilizing drops in other currencies. Foreign governments and businesses that borrowed in dollars would find it harder to repay those debts.

The hot economies of the past decade — the emerging markets of Brazil, Russia, India and China, collectively known as the “BRICs” — probably will grow in 2015 at their slowest pace in six years, says Oxford Economics, a forecasting firm. Plunges in oil and commodity prices have smacked Brazil and Russia hard.

China might expand by 6.5 percent or more, but it enjoyed nearly double-digit growth for decades.

The gap between the U.S. and the rest of the world reflects a fundamental trait of the U.S. economy: It’s more insulated from the rest of the world’s ups and downs than other major economies are. Exports account for just 14 percent of U.S. output, the smallest share among the 34 mostly rich members of the Organization for Economic Cooperation and Development.

The biggest wild card next year might be Japan. It fell into recession last quarter after a sales-tax hike hammered consumer spending. Prime Minister Shinzo Abe has delayed a second increase to 2017.
Japan’s central bank is buying government bonds and other financial assets in a bid to boost inflation and stimulate growth. But wages haven’t risen in line with prices, threatening consumer spending.

KRISTYNA WENTZ-GRAFF THE (PORTLAND) OREGONIAN The U.S. is expected to build on its recovery even more in 2015, growing at its fastest pace in a decade and nearing full health.



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