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THE INVESTOR
ANALYSIS
US ECONOMY
Consumer confidence is high, spending is on the up and jobs are being
created, but isAmerica’s economic recovery too good to be true?
By Jonathan Gregson
T
he US economy appears to be
surging ahead. Indeed, having
registered 4%GDP quarter-
on-quarter growth in the
second quarter, some analysts
say that its recovery momentum has nally
reached ‘escape velocity’. Consumer
con dence is higher than most predicted and
real spending increased by 2.5%.More than
200,000 new jobs have been created each
month over the rst half of 2014, leaving the
unemployment rate hovering just above 6%
1
.
Moreover, US companies are much leaner
following widespread restructuring forced
on them by the last recession, enabling them
to‘re-shore’ production and jobs back to the
US while at the same time generating strong
corporate earnings.The country is bene ting
from an unforeseen energy boom, largely
thanks to fracking, and the abundance of
cheap natural gas is encouraging investment
in petrochemicals and energy-intensive
industries. Forecasts by the US Energy
InformationAdministration point to a 25%+
increase in crude oil production by 2015.
‘While there are plenty of positives, it is
not a normal recovery by any means,’ says
