U.S. Economy Showing Signs of Fatigue, According To Decision Analyst’s Economic Index
Arlington, Texas—The Decision Analyst U.S. Economic Index stood at 111 in April 2017, a decrease from its December 2016-January 2017 level of 114. This four-month decline in the Index may only be a statistical aberration—and nothing to worry about. Or, the recent decline in the Index could be a harbinger of a coming economic downturn. It will take another couple of months to know for sure what the Index’s decline means. The Economic Index tends to lead U.S. economic activity by 6 to 12 months. Below is the past-10-year history of the U.S. Economic Index.
“What’s interesting is the correlation between the arrival of the Trump Administration and the decline of the U.S. Economic Index,” said Jerry W. Thomas, President/CEO of Decision Analyst. “It might only be a spurious correlation, but then again some of the actions of the new administration might be negatively affecting the economy. More aggressive enforcement of immigration laws carries the risk of reduced spending by immigrant groups, and the declining availability of immigrant labor might reduce productivity in some U.S. industries. Attempts to curtail travel from some countries might reduce travel-related spending. Protectionist trade policies and pronouncements might increase the risks that our trading partners would reduce spending on U.S. goods—and raise their own trade barriers. Possible disruption of the healthcare industry related to efforts to repeal the Affordable Care Act also carries economic risks,” said Thomas. “It’s too early to tell if the Trump Administration is negatively affecting the economy, but it’s clearly a risk factor.”
The Economic Indices for the U.S. Census Divisions have increased in the past 12 months. The Middle Atlantic Division had the highest score of all the Census Divisions, with an Index score of 114 for April 2017. The West South Central, Mountain, and Pacific Divisions each scored 113 for April 2017. The New England Division had the lowest Index score, 109 for April 2017.
The following chart compares Decision Analyst’s U.S. Economic Index to its Economic Indices for other countries. Globally, most countries are moving in a positive direction, including most countries in South America. Brazil increased 14 points in the past 12 months, while Argentina and Colombia each increased 8 points. In Europe, France increased 11 points in the past 12 months, and the Russian Federation increased 10 points. Spain is the only major European country showing a meaningful decline (minus 6 points).
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, the 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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