U.S. Recovery on Shaky Ground, According to Decision Analyst’s Economic Index
Arlington, Texas—The Decision Analyst U.S. Economic Index registered 107 in June 2015, a 2-point decline from May 2015, but a 4-point increase over the past 12 months. The U.S. Economic Index for June continues to signal slow economic growth. The Economic Index tends to lead U.S. economic activity by 6 to 12 months. Shown below is the history of the U.S. Economic Index.
“The U.S. Economic Index has been relatively flat over the past 6 months, a signal of slower economic growth in the U.S. in coming months. The strength of the dollar has slowed exports, and the uncertainty related to the Chinese economy and the Eurozone (because of Greece) have been major negatives. Structural problems in the U.S. economy are also factors, and Washington appears to have no interest in tackling these tough, long-term issues (such as debts and deficits, subsidies to various industries, and tax rate disincentives, etc.),” 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 marginal. Starting up new companies also negatively affects older companies, so the benefits of startup investments are not as great for the whole economy as it might seem on the surface. The excessive 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 iffy for the balance of 2015.”
The West South Central and South Atlantic Census Divisions each had an Economic Index score of 111 for June 2015 (they are tied for highest Index of all the U.S. Census Divisions). The East South Central Census Division has the lowest Economic Index score of 103 for June 2015.
The following table compares Decision Analyst’s U.S. Economic Index to its Economic Indices for other countries. In Europe, only Spain and Germany have seen their respective Indices increase in the past 12 months; Spain increased 3 points, while Germany increased 2 points. Russia’s Economic Index, however, is down 7 points over the past year. In South America, Brazil’s Economic Index has declined 21 points in the past year, while Argentina has increased 8 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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