U.S. Recovery Continues as Summer Begins, According to Decision Analyst’s Economic Index
Arlington, Texas—The Decision Analyst U.S. Economic Index registered 109 in May 2015. This is a 1-point increase from April 2015 and a 4-point increase over the past 12 months. The U.S. Economic Index continues to signal future economic growth, although the pace of that growth is likely to be feeble. The Economic Index tends to lead U.S. economic activity by 6 to 12 months. The U.S. Economic Index’s history is shown below.
“The slow pace of the U.S. economic recovery is quite disappointing, but it may prove to be the new reality we have to live with for the foreseeable future. An aging population, a declining share of adults who are employed, and a growing burden of corporate and governmental debt are huge drags on the U.S. economy, not to mention the lack of any meaningful efforts by Washington to address structural issues that are retarding U.S. economic growth,” said Jerry W. Thomas, President/CEO of Decision Analyst.
“Another factor in slow growth might be the tremendous flow of speculative capital into high-tech firms and startups, where rates of return are increasingly questionable. The flow of monies into private equity and venture capital firms is probably a neutral to negative net influence on the U.S. economy,” said Thomas. “Given all these factors, economic expansion in the U.S. will continue to be tepid for the balance of 2015. In Europe, the Economic Index is indicating likely expansion of the European economy during the balance of 2015, although at a modest pace. Debt problems in Greece and military struggles in Ukraine could derail the European economy, however, if things spin out of control.”
The West North Central Census Division has an Index of 113 for May 2015, which is an increase of 8 points over the course of the past 12 months. The Pacific and the New England Census Divisions each have an Economic Index of 104 for May 2015 (they are tied for lowest Index of all the U.S. Census Divisions), and each also increased 2 points over the past 12 months.
The following table compares Decision Analyst’s U.S. Economic Index to its Economic Indices for other countries. In Europe the Economic Index is trending up in most of the major countries, signaling economic expansion in Europe for the remainder of the year. Russia’s Economic Index, however, is down 6 points over the past year. In South America, Brazil’s Economic Index has declined 19 points in the past year, while Argentina has increased 12 points. The Economic Index for each country tends to lead economic activity in each country by 6 to 12 months.
The Decision Analyst Economic Index is based on a monthly online survey of several thousand households balanced by gender, age, and geography. The scientific survey is conducted in the last 10 days of each month. The Economic Index is calculated from 9 different economic measurements using a sophisticated econometric model. The result is a snapshot of coming economic activity in each country surveyed, as seen through the eyes of representative consumers living in the respective countries.
Decision Analyst conducts its concurrent economic surveys each month in Argentina, Australia, Brazil, Canada, Chile, Colombia, France, Germany, India, Italy, Mexico, Peru, the Russian Federation, Spain, United Kingdom, and the United States. Whenever the Decision Analyst Economic Index is greater than 110, it tends to signal an expanding economy. An Index value of 90 to 110 suggests a no-growth or slow-growth economy, and near or below 90 generally indicates economic contraction. These guidelines vary by country, however.
About Decision Analyst
Decision Analyst (www.decisionanalyst.com) is a global marketing research and analytical consulting firm specializing in strategy research, new product development, advertising testing, and advanced modeling for marketing decision optimization. For over 35 years, the firm has delivered competitive advantage to clients throughout the world in consumer-packaged goods, telecommunications, retail, technology, medical, and automotive industries.
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