As if it wasn't tough enough trying to predict where the economy is going, I now have more input. As if it wasn't tough enough trying to predict where the economy is going, I now have more input. For several weeks after the Munich World of Photonics show we were bombarded with grim news about the manufacturing economy and the economy in general in Europe. From our people on the ground in Europe to daily published statistics in the media to personal profile stories in the New York Times, all we read about was the sad state of the European economy and its impact on the average citizen.
The news got so bad we started to wonder where our European friends had been for the past year or so. We, here in the U.S., have been suffering for over a year and they just woke up six months ago and realized they were in recession. What gives here?
Well I don't need to sweat this one any more. Friday's Wall Street Journal, in a bold type face, front page, above-the-fold headline trumpets "Europe Recovers as U.S. Lags" with a deck of "Germany, France Escape Recession Even as Consumer Weakness Hobbles America."
Now this has got to be one of the shortest recessions on record; one month it's on, the next off. And all those complaints in Europe were for what? And what is worse, the article goes on to say that Europe is joining China, India, and "increasingly elsewhere in Asia" as countries rebound from the recession. What recession, I ask? Sounds more like a hiccup than a heart attack.
So here we sit in the Western Hemisphere, all alone as the rest of the world returns to economic health. Meanwhile in the U.S. the Federal Reserve lets us know that economic activity is leveling out but likely to remain "weak for a time."
I'd be ranting and raving about this dichotomy but further into the WSJ article is this buried gem about the cautious European Central Bank (emulating the Fed) predicting a slow return to sustained growth. Some economists believe "the ECB is behind the curve."
So I choose to take the same tone and think the Fed is "behind the curve" and, as I have said here for a few weeks, the recovery will move faster than is thought.
As I finish this blog on Monday morning another bit of good news arrives in the form of a New York Times (and other papers) news item about Japan's rebound from the deepest recession since WWII; courtesy, it is said, of a stimulus program.
So here we sit in the USA, looking at our friends in Germany, France, China, South Korea, Singapore, and Hong Kong enjoying some good economic news while we continue to dither about slow recoveries and the impact of stimulus projects. Acquaintances in some of the mentioned countries blame the U.S. for this world economic situation and they are privately smiling as we muddle around on a solution while they are gearing up to increase their export to this country when the consumer comes back into the market.